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Novo Banco’s damaged small investors meet to define legal strategy

With stories released in the media yesterday, suggesting the Bank of Portugal has offered to “partly compensate” Novo Banco bondholders who lost their money overnight in its controversial retroactive bond dump, the new association of small investors formed to fight the issue is in no mood for any kind of compromise.

Meeting later today to define legal strategies, a spokesman told the Resident: “The main topic of the agenda will be to vote on which firm of lawyers should represent us to annul the Bank of Portugal’s decision, both in the courts and very possibly in the European Tribunal”.

Thus, news of the so-called “no creditor worse off” commitment made by the central bank has failed to cut much ice.

“The offer of compensation seems clearly aimed at mending some of the damage done by turning a contested judgement into a better one”, a senior Lisbon-based banker told the Financial Times yesterday.

But there are doubts that it will ‘work’, as any compensation would have to come out of the country’s Resolution Fund which some sources claim “could not begin to pay out on” the number of claims that are involved.

Informing news media of tonight’s meeting, the AOSPNB (association of senior bond holders damaged by Novo Banco) explained that they have already amassed 85 members – that’s 85 private investors, both Portuguese citizens, emigrants and “a few small companies” which between them have lost a total of €14 million.

“We know there are still other who don’t know of our association”, said the source. “They can contact us on”.

Tonight’s meeting is in Lisbon at 7pm. Anyone keen to attend should telephone: 932223222.

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