Tenoe's Opportunity to Give One to the Russians

Posted on Apr 08, 2022. by NTI

The High Court is doing its bit to rally around the besieged people of Ukraine and VTB Capital have taken the brunt of their ire this week. VTB tell us on their website that they offer a full range of investment banking products and services to Russian and international clients, focusing on arranging operations in the debt, equity, global commodities markets, developing investment and asset management, advising clients on M&A and ECM deals in Russia and abroad.

Not any more you don't. Take this on behalf of the village of Vorzel, where Russian soldiers (we're not going to agrandise this statement by throwing in an 'alleged') tossed a smoke grenade into a basement full of Ukraine women and children, then opened fire on them as they tumbled out.

On Wednesday, the High Court gave the green light to Teneo to begin carving up VTB Capital if the UK-based investment unit of Russia-owned JSC VTB Bank gets an exemption from US sanctions imposed on the bank over the invasion of Ukraine.
Lawyers for VTB Capital told the High Court at a hearing that although the company is solvent, it is unable to pay its employees or bills due to economic sanctions slapped on its Russian state-owned parent by Western governments.

Rubbish for the employees; but, well, good.

The investment bank has US$338 million on its balance sheet and US$234 million in bonds, cash and other assets, but sanctions means its money is frozen. "There is no doubt that the company is insolvent and unable to pay its debts under insolvency law", Judge Fancourt said. Hoorah to HSBC, its correspondent bank in the UK, who closed its account in March 2022.

The judge argued that the Administration process was less chaotic than Liquidation, and would allow creditors to be paid out more quickly. The bank is the third Russian lender to close in recent weeks. Directors of Sberbank CIB (UK) Ltd applied for Administration on 1 April, blaming the 'ability and risk appetite of critical suppliers to work with firms with links to the Russian state'.

Neither subsidiary has been sanctioned. But its parent companies, Sberbank of Russia PJSC and JSC VTB Bank, have been hit with sanctions and banned from clearing sterling payments in the UK Teneo is also handling Sberbank's Administration.

It will be no consolation to those in Ukraine who have lost everything, but at least we in the insolvency sector are doing our tiny bit to support the cause.

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