TMF Trust Company (Argentina) S.A. and Banco de Galicia y Buenos Aires S.A have been advised by Marval, O´Farrell & Mairal, in the restructuring of Banco Finansur S.A., prior to filing for bankruptcy.
The assets and liabilities were separated and excluded from Finansur on the restructuring, with deposits defined as senior and unsecured. The assets were transferred to a trust, in which TMF acts as trustee.
Finansur remains as a subordinated beneficiary, and will have a right to collect any remaining proceeds subject to prior payment of the debt securities issued by the Fidensur Trust.
On March 8th, The Argentine Central Bank (BCRA) intervened and Finansur entered into a special liquidation process that led to its restructuring on March 14th, through the special procedure for the exclusion of assets and liabilities provided by Article 35 bis of the Argentine Financial Institutions Law No. 21,526 (FIL).
Under this procedure, Fidensur Private Financial Trust was constituted for the acquisition of the fiduciary property of substantially all of the assets of Finansur by TMF, as trustee, Finansur, as settlor, and Banco Galicia as beneficiary and collection agent. The Fidensur Trust issued senior and subordinated debt securities to Banco Galicia, representing the value of the liabilities assumed by Banco Galicia.
Banco Galicia has assumed all of Finansur’s senior deposits, and has received in exchange Finansur’s cash availabilities net of all labor liabilities, to be paid by Finansur.
In addition, Seguro de Depósitos S.A. (Sedesa), a public limited company that aims to administrate the deposit guarantee fund (FGD) of depositors in the liquidation process of financial institutions, has purchased subordinated debt securities issued under the Fidensur Trust from Banco Galicia for a total of $ 7.5m.
Marval, O´Farrell & Mairal, led by partner Roberto Silva and assisted by Francisco Abeal and Agustín López, acted as legal counsel to Banco Galicia. BSCP Abogados served as counsel to Sedesa.