Creditors of Tartu Savings and Loan Association vote for liquidation
Nearly 60% of creditors at the Tartu Savings and Loan Association voted to liquidate the cooperative, whose liabilities are three times higher than available assets.
At the general meeting of creditors of the Tartu Savings and Loan Association, nearly 60% of participants voted to terminate the cooperative's activities. The cooperative's liabilities to depositors amount to approximately €61 million, while assets that can be converted into cash are estimated at only €17 million.
The meeting started almost an hour late due to procedural issues. Of the roughly 300 attendees, only 206 were granted voting rights; the others had not submitted their claims in time within the bankruptcy proceedings. Depositor Ülo Kirst expressed disbelief that some lost their voting rights simply because they missed the deadline.
Bankruptcy administrator Tarmo Peterson presented a report on the cooperative's actual financial situation. The main cause of the losses was large loans issued to a small circle of borrowers. Of the €39 million in loans granted, €36 million went to companies linked to just four or five individuals. According to Peterson, recovering a significant portion of this money will be extremely difficult, as some borrowers are not engaged in real economic activity.
Depositor Sulev Valdmaa said he was shocked to learn that the cooperative's chairman, Andro Roos, who had urged people to invest in the Estonian economy, was actually distributing money to a narrow circle of people. Lawyer Erki Pizuke stated that this was a case of abuse of trust—people were shown one picture while reality was completely different.
After the hours-long meeting, depositors supported the liquidation of the cooperative and elected a creditors' committee. The bankruptcy administrator must now collect debts and sell assets to recover at least a portion of the funds for depositors. The bankruptcy process may take several years.
