On 30 July 2014, the Portuguese bank, Banco Espírito Santo S.A. (BES), reported losses of approximately €3.5 billion, which largely exceeded the losses previously disclosed to the Bank of Portugal. These losses were attributed to BES’s intra-company loans to certain of its affiliates in the Espírito Santo Group (GES).
Owing to the fact that subordinated bondholders of BES and other bondholders of GES are now left holding worthless investments, some bondholders have begun discussions with counsel to develop a litigation strategy.
RK&O is monitoring the situation in Portugal and Luxembourg and will continue to provide updates. Click here to subscribe to Market Flash or any of the other RK&O publications.