Several pension providers’ large-scale compensation claim against, among others, private equity group Altor, two banks, the management and the bankruptcy after OW Bunker may not be decided before 2025. In the meantime, claim has grown to DKK 1.3bn (USD 190m).
A number of Denmark’s largest pension providers and institutional investors have to be very patient before seeing a conclusion in the compensation case regarding OW Bunker, which went bankrupt in 2014 with a major debt after only eight months as a listed company.
Even though a consortium of ATP, PFA and PensionDanmark, among others, in 2016 and 2017 put forth a compensation claim of DKK 833m (USD 122m) against a number of parties in the case, a final decision may be far off, sources tell WPO.
A high number of lawyers and process questions have meant that the case still only runs on paper and with exchange of documents.
Several factors prolong the case
A decision in the case seems far off, partly because it includes several parties and their lawyers, who need to find space in their schedules. And partly, because Danish court Østre Landsret, where the case will take place, already has a lot of other cases.
But also because the case awaits whether the insolvency administrator of the bankruptcy estate succeeds with raising the claim against Altor and accounting firm Deloitte to DKK 1.2bn, a raise of roughly DKK 1bn.
With the available time spots in Østre Landsret, we can’t see (…) that it will possible to have a verdict before the end of 2024. And it may not be before 2025.
Source tells WPO.
Last month, the Supreme Court of Denmark denied that the insolvency administrator could raise the claim by DKK 1,014m. But a new decision on a potential raise of the estate’s claim is expected soon in Østre Landsret.
Supreme Court of Denmark rejects major claim in OW Bunker bankruptcy estate
If the administrator is not able to raise the claim, it will probably be less interesting for the investor consortium to have the bankruptcy estate after OW Bunker convicted with compensation responsibility.
In that case, there will not be enough money in the estate for the creditors.
Instead, the investor consortium probably has their attention directed toward the banks Morgan Stanley and Carnegie as well as private equity group Altor. If the banks and Altor are made liable for the claims, there will be enough money to cover the compensation claim.
Who at Altor will then have to pay?
But it may lead to a legal confrontation as to who in Altor is technically liable to pay. Is it the fund, the management company or the Luxembourg holding company, which was the original seller?
If the fund, which has already returned a dividend to the fund’s investors, is made responsible, can the fund then demand a return of the money?
The management is also to a certain degree covered by an insurance, and there is also a prospectus liability insurance, but most likely not something that can cover the entire claim, according to the sources.
The OW Bunker case is expected to run for at least 100 court days, meaning the case will probably have to run over eight months.
”With the available time spots in Østre Landsret, we can’t see – even if all parties are cooperative and no further delays seen – that it will possible to have a verdict before the end of 2024. And it may not be before 2025,” says a source to WPO.
According to the source, it is not likely that the case will begin in Østre Landsret before 2024. When a ruling is in place, there is furthermore ”a good chance that the case will be appealed” to the Danish supreme court.
As such, a first-round decision may come ten years after OW Bunker went bankrupt with a major debt.
Compensation claim significantly raised
An appeal will moreover prolong the completion of the OW Bunker struggle, and of who is potentially responsible and might have to cover a loss of DKK 833m, which the 24 investors claim to have lost due to the bankruptcy.
At the same time, lawyer costs are growing for the case’s parties, including the investor consortium with its 24 pension providers and institutional investors.
But the compensation claim of DKK 833m is growing as well. An annual process interest of 8 percent is connected to the figure, meaning the claim has grown to roughly DKK 1.3bn in six years.
Materially, there is nothing new in the case, which has changed since the consortium’s press announcements from 2016 and 2017. The consortium has gained knowledge on a lot of details, but has maintained the same view on the case in general, according to sources.
