Euram: Settlement in Progress - ESA Paid Out More Than 36 Million Euros

The liquidation of European American Investment Bank AG, or Euram Bank for short, has been ongoing for a year. Almost all deposits covered by the deposit insurance (ESA) have already been paid out, but there is no end to the liquidation in sight. According to the latest report from the insolvency administrator, the liquidation will take "considerable time." Meanwhile, the Economic and Corruption Prosecutor's Office (WKStA) is investigating unknown perpetrators on suspicion of embezzlement.

"Bank Liquidations Always Take a Long Time and Are Always Complex"

"Bank liquidations always take a long time and are always complex," said Gerhard Weinhofer, managing director of the creditor protection association Creditreform, to APA. However, for a bank bankruptcy, it is proceeding "quite quickly," added Creditreform insolvency expert Stephan Mazal. Banks are liquidated differently from other companies under the Bank Recovery and Resolution Act (BaSAG). The law deviates from the principle of equal treatment of all creditors. Primarily, savers are always served first at banks, with payouts made through the deposit insurance (ESA).

To date, the ESA has compensated 36.8 million euros, which is 90.6 percent of the covered deposits. 3.8 million euros are still outstanding. This affects 134 customers, with a sanctions check ongoing for six of these customers, according to ESA managing director Stefan Tacke recently in response to an APA inquiry. The remaining customers who have not yet been compensated are mostly based abroad and have not yet contacted the ESA, or the ESA's attempts to contact them have gone unanswered.

The covered deposits are only a fraction of the total claims against the bank. In total, the registered liabilities amount to around 545 million euros, according to the report by insolvency administrator Thomas Engelhart from early September. However, around 191 million euros of this is disputed. Whether other creditors can be served beyond the secured deposits remains to be seen. The insolvency report refers to an interim distribution planned for this year, but in this case, it is likely that only the deposit insurance as a priority creditor will be considered.

Investigations Underway

Meanwhile, the WKStA is investigating unknown perpetrators on suspicion of embezzlement. The impact on the insolvency proceedings is not yet assessable, writes Engelhart in the report. The investigations concern "economically unjustifiable loan approvals." The private bank, founded in 1999, was primarily specialized in real estate financing alongside private banking. Among the owners of Euram Bank are representatives from the real estate industry. According to data from the "Wirtschaftscompass," the bank's parent company Euram Holding is partly owned by Farro Consulting GmbH with just under 10 percent, which belongs to the Farrokhnia family. The family owns the real estate companies of the insolvent Imfarr Group.

(APA/Red)

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