Bulgarian Court Opens Way for Insolvency Case Against KTB to Proceed

A top Bulgarian court has definitively refused to consider an appeal against the revoking of the banking licence of Corporate Commercial Bank (Corpbank or KTB), opening the way for an insolvency case against the collapsed lender to proceed.

The appeal against the Bulgarian central bank's decision to withdraw the licence had been filed by KTB's majority owner Bromak EOOD. The Bulgarian Acquisition Company II, another Corpbank shareholder, and Vera Ahundova, a representative of a group of KTB depositors who suffered losses from the bank's closure, supported the appeal.

A five-judge panel at the Supreme Administrative Court (SAC) headed by court chairman Georgi Kolev ruled on Thursday that KTB's shareholders hold "no legal interest" in appealing.

The ruling, which is final and cannot be appealed, opens the way for an insolvency lawsuit against KTB to proceed at the Sofia City Court (SCC).

In January, a three-judge panel at the SAC upheld the central bank’s decision to cancel the KTB's banking licence. Bromak, a company owned by Bulgarian businessman Tsvetan Vasilev, appealed that ruling before the SAC's five-judge panel.

Bulgaria's central bank revoked KTB's banking licence and asked the SCC to declare it insolvent in November of last year but Bromak's appeal at the SAC has stalled proceedings on the insolvency case.

The central bank seized control of KTB and appointed administrators in June following a run on deposits at Bulgaria's fourth-largest lender.

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