Annual report 2009 - Dexia.com

Notes to the annual fi nancial statementsManagement reportConsolidatedfinancial statementsAnnual financial statementsAdditional informationdemands the seizure of property in an amount of approximatelyEUR 29,000,000 to be borne by Dexia Bank.Dexia Bank considers it has serious grounds for contestingthe charges.The oral pleadings regarding the criminal aspect of the casewere closed on 19 December 2008. The Court of Appealdeliberated on the criminal case on 30 January 2009. Nodate was fixed for the delivery of its judgement. The processingof the claims by the civil parties to the case was postponedindefinitely.Parties alleging that they have suffered losses in relation tothe prosecuted offences have until the last day of the trialto enter a civil claim in the criminal proceedings or make aclaim for damages, and for as long as the right to institutecriminal proceedings lasts. This means that new civil actionscan in principle be introduced if the Court of Appeal were tosentence Dexia Bank.On 31 December 2009, Dexia Bank was aware of the followingrelevant claims for damages (only the most importantare listed below):• Around 15,000 individual shareholders (including theshareholders represented by Deminor and Spaarverlies) whoclaim around EUR 318,000,000.• The Belgian receivers of LHSP SA who are claiming EUR744,128,638.37. Part of this claim duplicates the claims ofother parties. In the present state of the analysis by thebank, that duplication is unlikely to be such as to lead to asubstantial reduction in the claim by the receivers of LHSPSA.• Mercator & Noordstar which is claiming EUR 17,662,724.• The receivers of The Learning Kernel SA who are claimingEUR 7,259,107.06.• The receivers of L&H Holding who are claiming a provisionalEUR 1 for their participation in LHSP (of more than 12million shares). The accounting value of this holding as at 31December 2000 was EUR 51,702,739.05, as shown by theannual accounts of L&H Holding.All the above-mentioned amounts are principal amounts towhich interest must be added. The amount of the interestand the date from which it should be calculated are stillunder discussion.In the worst case, the rate of interest to be applied is thestatutory rate of interest which between 2000 and 2009 hasvaried between 7% and 5.5%.With regard to the starting date from which the interest is to becalculated, the civil parties differ in their approach as to whetherit should be a particular date (e.g. 9 November 2000 – the dateon which the LHSP share was suspended–, the date on whichthe LHSP shares were bought, or the date on which LHSP wasdeclared bankrupt in October 2001) or a mean date.For the following reasons, among others, it remains very difficultto determine the real extent of the damages claimed:• a number of parties are claiming provisional amounts;• the rate of interest to be applied and the USD/EUR conversionrate are still under discussion;• the final number of civil parties is still unknown;• proving the link between the damage suffered by theinvestors and the alleged wrong committed by ABC is a verycomplicated matter.Dexia Bank, in its turn, has made a claim as a civil partyagainst Messrs Lernout, Hauspie, Willaert and Bastiaens andagainst LHSP SA in October 2007, claiming damages for aprovisional amount of EUR 2. Dexia Bank’s claim is in relationto the losses suffered on its LHSP portfolio (Dexia Bank isstill holding 437,000 LHSP shares) and to an amount of EUR27,926,275.50 owed to it by LHSP under a USD 430 millionsyndicated credit facility dated 5 May 2000 (see paragraph4.4.7.2.1. above). The solvency of these parties however isuncertain.4.4.7.2.4. Civil proceedings against Dexia Bank inBelgium4.4.7.2.4.1. LHSP receivers’ claimIn July 2005, the Belgian receivers of LHSP filed an actionagainst twenty-one parties before the Commercial Courtof Ypres, including Dexia Bank. They claim compensationfor the net liabilities of LHSP in bankruptcy. According tothe receivers’ provisional assessment of the claim, the claimwould amount to approximately EUR 439 million. This claim,to a large extent duplicative of the claims introduced by thereceivers in the criminal proceedings, is not likely to have anydevelopment until after the end of the criminal proceedingsbecause of the principle le criminel tient le civil en état.4.4.7.2.4.2. Claims by individualsCertain civil claims have been filed before the CommercialCourt of Ypres by groups of investors in LHSP shares againstvarious parties, including Dexia Bank. The main claim wasfiled by Deminor on behalf of 4,941 investors. The claimantsseek damages for their losses, which have not yet beenassessed. Moreover, 151 investors affiliated to Spaarverliesalso commenced civil actions. These claims, to a large extentduplicative of the claims introduced in the criminal proceedings,are not likely to have any development until after theend of the criminal proceedings because of the principle lecriminel tient le civil en état.4.4.7.2.5. Civil proceedings against Dexia Bank inthe United StatesAll the cases brought against Dexia Bank in the United Stateshave been finally terminated in full in 2008.4.4.7.2.6. L&H HoldingOn 27 April 2004, the bankruptcy receiver of L&H Holdingsummoned Messrs Lernout, Hauspie and Willaert, along withBanque Artesia Nederland (BAN) and Dexia Bank, to pay theprincipal amount of USD 25 million.This is connected with a USD 25 million loan granted to MrBastiaens by BAN in July 2000 for the purposes of the acquisitionby Mr Bastiaens of LHSP shares owned by L&H Holding.The selling price of USD 25 million was credited not tothe account of L&H Holding but to three separate accountsopened by Messrs Lernout, Hauspie and Willaert. Taking theview that this money was due to L&H Holding, the L&H Holdingbankruptcy receiver is claiming its repayment.This claim is not likely to have any development until afterthe end of the criminal proceedings because of the principlele criminel tient le civil en état.Dexia Bank vigorously contests the grounds for theseapplications.228Dexia Annual report 2009