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Spain bank rescue agency receives more than 1,000 claims over Popular wind-down

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Spain bank rescue agency receives more than 1,000 claims over Popular wind-down

Spain's bank rescue agency, FROB, has received more than 1,000 claims against it over the winding down and subsequent firesale of Banco Popular Español SA to Banco Santander SA for €1, it said in its annual report May 28.

The agency also said it was aware of 262 appeals against the resolution in the Spanish high court, which had been suspended awaiting the outcome of legal action in the European Court of Justice.

Investors lost about €3 billion in the bank, and some have undertaken legal action against the European Commission and the Single Resolution Board, or SRB, the EU agency in charge of winding down banks, in the European Court of Justice.

Following a liquidity crisis, the European Central Bank declared Popular as "failing or likely to fail," leading to the SRB and FROB to wind down the bank and sell it onto Santander.

The SRB has said it will not pay compensation to affected Banco Popular shareholders and creditors, but has opened a 'right-to-be-heard' procedure for 12,000 submissions. FROB noted that the process was ongoing, but said it considered that it would probably not be necessary to compensate investors.