HAMBURG & KIEL, Germany–(BUSINESS WIRE)–Charles Barker Corporate Communications GmbH is issuing this press
release on behalf of the group of creditors outlined below.
Two groups of more than 35 institutional investors (the “Creditors”) and
their affiliates who manage in aggregate more than EUR 850 billion today
announce that they will not participate in Hamburg Commercial Bank AG’s
(“HCOB” or the “Bank”) upcoming senior bond financing.
The Creditors include multiple German insurance companies as well as
investment funds based in Germany, elsewhere in Europe and the United
States. The two creditor groups collectively own over EUR 1.4 billion of
tier 1 instruments issued by HCOB and are separately advised by the law
firms of Quinn Emanuel Urquhart & Sullivan, LLP and BRP Renaud & Partner
mbB.
This statement is in reaction to news that the Bank is holding a series
of fixed-income investor meetings across Europe over the next two weeks
following which HCOB plans to issue new senior-ranking debt.
In the Creditors’ view the Bank, over many years and continuing today,
has exhibited a total disregard for creditors’ rights and the rule of
law. To make matters worse, in the Creditors’ opinion, HCOB’s management
has knowingly misled investors.
The recent actions of the Bank under its new private equity owners, who
include Cerberus Capital Management, L.P., J. C. Flowers & Co., and
GoldenTree Asset Management LP (together the “New Owners”), have only
further increased the Creditors’ concerns.
In the opinion of the Creditors, HCOB’s actions adverse to its creditors
include:
-
Using illegal accounting practices with the objective of artificially
creating losses. This was achieved, in part, by impermissible
increases to its reserve (§ 340g of the German Commercial Code). -
Violating numerous contractual provisions starting in 2009 with the
objective of harming creditors. -
Impermissibly using losses carried forward to write down its tier 1
instruments multiple times with the same loss. -
Selling an NPL portfolio to certain affiliates of its New Owners below
market value at the expense of creditors. -
Terminating its tier 1 instruments unlawfully thereby purportedly
crystallizing the above impermissibly-generated losses and providing a
windfall to the New Owners.
The Creditors also have no confidence that disclosures by the Bank in
its prospectuses and statements made by HCOB’s management can be relied
upon. HCOB, including its CEO Stefan Ermisch and the CFO Oliver Gatzke,
has, in the opinion of the Creditors, made statements which were
self-serving, incorrect and misleading about the Bank’s accounting, its
outlook and planned actions. As late as 26 November 2018, HCOB made a
disclosure that could only be read to suggest that its tier 1
instruments would be written-up to par and would pay coupons in the
future. Yet a few days after this date, the tier 1 instruments were
terminated.
Contacts
Charles Barker Corporate Communications GmbH
Thomas Katzensteiner /
Tobias Eberle
+49 69 794 090 -25 / -24
[email protected]
[email protected]
