Court says Vieira does not have to pay 291 million to NB

The Lisbon Court of Appeal ruled in favor of Luís Filipe Vieira and considered that the former president of Benfica does not owe anything to Novo Banco regarding the Mandatorily Convertible Securities (VMOC) contract, reports Correio da Manhã.

The issue at hand is an appeal by Novo Banco, which, in a July 10 ruling, exempted Luís Filipe Vieira from paying a debt worth €291 million in principal, interest, and the VMOC conversion premium. The bank can still appeal the decision to the Supreme Court of Justice and, according to CM, is evaluating whether to do so.

Novo Banco's objective with the appeal was to have the conversion of the VMOC into shares of Promovalor II and Inland deemed non-existent, after the former president of Benfica had been found innocent in the first instance.

According to the ruling cited by CM, the Lisbon Court of Appeal wrote that “in a contract in which the obligation to repay is realized in kind (conversion into shares) and the payment of interest and the conversion premium is agreed to be paid with the delivery of the shares, we are faced with distinct obligations under the same contractual source”, therefore concluding that “cumulative obligations” are not at stake.

Although Novo Banco claims that the conversion of the bonds was “subject to the simultaneous payment of interest and the bond conversion premium”, Luís Filipe Vieira's defense asserts that “the technical sheets, which form part of the contracts, provided that the payment of interest and premiums would occur upon delivery of the shares, which presupposes that the conversion had already occurred”.

Luís Filipe Vieira “erased” debts of 160 million from real estate companies without the knowledge of Novo Banco, which is considering liquidation.