BEC beats Financial Stability and the bankruptcy estate of Amagerbanken
Since early 2014, Bankernes EDB Central (BEC) has been conducting legal proceedings against the bankruptcy estate of Amagerbanken and against Amagerbanken af 2011 (Financial Stability), which took over the bank’s activities immediately prior to the bankruptcy and continued/divested the company, respectively.
BEC is one of the three independent data processing centres that supply Danish banks with IT. Without IT, the banks cannot operate. Amagerbanken was one of BEC’s major members.
BEC (and the other data processing centres) have established a large organisation, ensuring product de-velopment and appropriate IT operation. Through BEC, member banks are supplied with IT almost at cost price. In return, members can leave the data processing centre only at fairly long notice. All the data processing centres have long notification periods (up to five years), and compensation is payable if leaving prior to expiry of the notification period.
Amagerbanken’s activities were transferred to Amagerbanken af 2011 according to the provisions regarding “Bank Package III” in the Danish Act on Financial Stability. Under these provisions the new bank takes over all the old bank’s assets in return for assuming a proportional part of the debt (corresponding to the expected value of the assets). Relative to the “regular” creditors, Amagerbanken af 2011 took over 84.4% of the debt.
When Amagerbanken was transferred to Financial Stability in February 2011, BEC calculated the com-pensation amount at approximately DKK 60m, in addition to set-off against a capital contribution made by Amagerbanken and transferred to Financial Stability.
Via the Legal Advisor to the Danish Government, Financial Stability and the Amagerbanken bankruptcy estate claimed that the provisions of the Danish Bankruptcy Act regarding termination at reduced notice (bankruptcy regulation) would apply in relation to BEC, reducing BEC’s claim to nothing, and they claimed that BEC should disburse the capital contribution. Apparently, the position of the Legal Advisor to the Danish Government was generally applied in a number of other bankruptcies without being chal-lenged.
Bech-Bruun assisted BEC in filing a claim of approximately DKK 60m, so that Financial Stabil-ity/Amagerbanken af 2011 would pay approximately DKK 50m and the bankruptcy estate of Amagerbanken would pay an additional dividend of approximately DKK 10m on the remaining claim.
Owing to its fundamental character in relation to the scope of the Act on Financial Stability relative to the general principles of the Bankruptcy Act, the case was referred to the High Court of Eastern Denmark, which gave its ruling on 23 December 2016, finding in full for BEC against Amagerbanken af 2011 as well as Amagerbanken in bankruptcy.