- Jurisdiction
- European Union
Hello,
Private Ltd Company (SME) - Family enterprise
-
Has an overdraft facility and
yearly expiring Letters of Guarantee (L/G) at a
-
local Credit Institution (CI)
CI has been renewing the letters of guarantee for the past 9 years automatically.
12 months ago SME requested the consolidation of the L/Gs into a single L/G with a longer validity period and a lower interest rate on the credit facility guaranteeing the L/G.
CI responded with a request for further financial information which SME provided.
6 months later CI proposed that SME should proceed with a 'restructuring' of the current facilities.
SME's representatives replied that they were requesting renewals and better terms and not a restructuring. SME insisted that a 'restructuring' can affect the SME's credit record and since all their obligations were up-to-date there was no such need. CI representatives also repeated in their communication the fact that all obligations were up to date and that the SME was a 'good client'.
However representatives of the CI came back with another pretense claiming that the SME's financial data was lacking. Data which the CI had not requested and did not require for the past 9 years.
At the moment the supplier of the SME has requested and acquired the value of one of the L/G's and will proceed to do so for each one, a day before their expiry.
Representatives of the SME have requested in writing to the manager of the local branch of the CI the immediate renewal of the L/Gs until negotiations of the credit facilities renewals are complete.
Manager requested a meeting with representative of SME and at said meeting informed them that the only option is to restructure current facilities even though they are performing positively.
Representatives of CI promised that upon signing of the restructuring agreement applications the L/Gs shall be renewed.
SME eventually proceeded in signing restructuring agreements and for the past 3 months the CI has been delaying the procedure and has not yet renewed the L/Gs.
and are ignoring communication.
What legal measures can the SME take?
Furthermore, SME's relations with supplier have been deteriorated and payment schedule has been corrupted.
Can SME file a case for damages? Can it apply for a 'mandate' that the Court will ask the CI to renew the L/Gs?
Said case is in a EU country but with Common Law system
Thank you in advance.
Private Ltd Company (SME) - Family enterprise
-
Has an overdraft facility and
yearly expiring Letters of Guarantee (L/G) at a
-
local Credit Institution (CI)
CI has been renewing the letters of guarantee for the past 9 years automatically.
12 months ago SME requested the consolidation of the L/Gs into a single L/G with a longer validity period and a lower interest rate on the credit facility guaranteeing the L/G.
CI responded with a request for further financial information which SME provided.
6 months later CI proposed that SME should proceed with a 'restructuring' of the current facilities.
SME's representatives replied that they were requesting renewals and better terms and not a restructuring. SME insisted that a 'restructuring' can affect the SME's credit record and since all their obligations were up-to-date there was no such need. CI representatives also repeated in their communication the fact that all obligations were up to date and that the SME was a 'good client'.
However representatives of the CI came back with another pretense claiming that the SME's financial data was lacking. Data which the CI had not requested and did not require for the past 9 years.
At the moment the supplier of the SME has requested and acquired the value of one of the L/G's and will proceed to do so for each one, a day before their expiry.
Representatives of the SME have requested in writing to the manager of the local branch of the CI the immediate renewal of the L/Gs until negotiations of the credit facilities renewals are complete.
Manager requested a meeting with representative of SME and at said meeting informed them that the only option is to restructure current facilities even though they are performing positively.
Representatives of CI promised that upon signing of the restructuring agreement applications the L/Gs shall be renewed.
SME eventually proceeded in signing restructuring agreements and for the past 3 months the CI has been delaying the procedure and has not yet renewed the L/Gs.
and are ignoring communication.
What legal measures can the SME take?
Furthermore, SME's relations with supplier have been deteriorated and payment schedule has been corrupted.
Can SME file a case for damages? Can it apply for a 'mandate' that the Court will ask the CI to renew the L/Gs?
Said case is in a EU country but with Common Law system
Thank you in advance.
