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European Bank Recovery & Resolution

Throughout the financial crisis, Shearman & Sterling has been at the forefront of the EU’s evolving regulatory and legal response. We have advised banks, governments and creditors in most of the major bank recovery and resolution situations, including Greece’s largest banks on their recapitalizations and restructurings in 2015; the creditor committees of Banco Espirito Santo, HSH Nordbank and Co-Op Bank (Co-Op was so far the only the voluntary “bail in”), and KKR/Pillarstone in their landmark acquisition of Greek NPL debt portfolios.

Our European bank recovery and resolution practice brings together industry-leading experience in financial regulation, State aid, restructuring, litigation, bank finance and capital markets.

Because of the breadth of our experience, clients call on us to support them on their most critical restructuring, recovery and resolution situations.

Our recent creditor side mandates include:

  • Subordinated creditor committee of Banco Espirito Santo
  • Subordinated creditor committee of HSH Nordbank
  • Subordinated creditor committee of Hypo Alpe Adria (HETA)
  • Senior creditor committee of National Bank of Greece
  • Subordinated creditor committee of Co-Operative Bank
  • KKR/Pillarstone in acquisition of NPL portfolios of Eurobank

Our recent bank side mandates include:

  • Eurobank recapitalization and restructuring
  • Pireaus bank recapitalization and restructuring
  • Monte Paschi di Sienna recapitalization and restructuring
  • ABN Amro privatization and IPO

European Banking industry client publicationsDefending Bank Creditors in the Collapse of Portugal’s Second-Largest Bank
In August 2014, leading Portuguese bank Banco Espírito Santo (BES) became the first bank to be subjected to a “resolution” measure, under the Bank Recovery and Resolution Directive (BRRD), which was still in draft form at that time. The resolution involved a split into a “good bank” and a “bad bank” – with over 90% of BES assets being transferred to the good bank.

Holders of subordinated debt in BES turned to Shearman & Sterling for assistance when allocated to the “bad bank.” We represent them in the vastly complex picture that is emerging in relation to the bank and a wide range of legal challenges involving various parties. This includes initiating legal proceedings before the European Court of Justice challenging the European Commission’s decision to approve Portugal’s bailout of the bank, alleging breach of the State aid rules.

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