Collective Action

The right to financial privacy and bank secrecy is often considered a fundamental right. For various reasons, consumers believe that their personal financial information should be kept private. The law protects individuals by allowing them to decide to what extent they wish to share such personal information. Therefore, financial challenges are generally kept private. In cases of loss of money due to bank failure or fraud, individual customers often keep their problems to themselves. Addressing a problem is one thing, but finding the solution is another. If a bank fails, inexperienced creditors need to figure out how to get their assets secured and their money repaid. Not only is this inconvenient and difficult. It is also inherently risky, where oversights and errors are punished with disqualification from recovery options. It is not an ideal position for anyone. Consequently, collective action has the potential to do everything right from the beginning, while the costs and expenses of recovery operations and civil action are spread over several creditors.

Group Efforts in Bank Failure, Deposit Guarantee Claims and Bank Liquidation

The resilience of financial institutions is a combination of strong capital and liquidity requirements and a robust resolution regime. These financial institutions can be privately owned or publicly traded. Systemic financial institutions tend to be publicly owned. Thus, their failure may adversely affect society, and their rescue may require taxpayer funding. As a result, their supervisors treat them differently. When problems occur, early intervention is critical to preventing crises. With a rebuttable presumption that suspension of its enforcement is against the public interest, a resolution decision is immediately enforceable. Such actions are supported by general insolvency law, administrative resolutions, and national laws. Their complexity asks for applied knowledge, and tangible and reliable strategies for the inexperienced but motivated layman.

In bank failures, creditors must allocate time they don’t always have, reserve financial resources they don’t want to spend, and comprehend regulatory matters they don’t always want to think about. Individual account holders often have difficulty reading and understanding international treaties, frameworks, conventions, legislation, and cases. As a result, asset recovery may become an uncertain and expensive exercise for inexperienced creditors. When proven strategies are leveraged by joint efforts, synergy occurs. However, group actions should not be regarded as class actions or collective redress. Group efforts and collective action merely use several of the same principles as these recognized mass claims.

A proposed closure of a financial institution passes through different stages of resolution. Together, these different stages ensure maximum account recovery potential for account holders and other creditors. Statutory administration, deposit insurance, collective civil actions and eventually, bank liquidation are among them. Creditors and account holders often feel wronged but must set aside their frustration in order to comply with the terms of the resolution. They must also proactively submit their claims for account balance repayment. Therefore, a systemic and strategic plan must ensure reliable, predictable, and proven settlement of account balances. Through group efforts, account holders can leverage experience and know-how, cut recovery costs, and drastically increase their chances of repayment.

Total Repayment of Your Account Balance is Our Priority

Most bank account holders perceive deposit insurance as a guarantee that deposits will be repaid. However, not all bank deposits are insured. Exceptions, misconceptions, administrative mistakes and creditor oversight can result in the rejection of a refund request. Moreover, many bank depositors underestimate the importance of deposit protection and its role in further asset and fund recovery procedures. Legal Floris LLC, the initiator of Deposit Guarantee Claim, firmly advocates responsible behavior and predictable actions by creditors to provide maximum repayments and minimize their risk.

After failure and at every stage of the bank resolution process, Legal Floris LLC helps bank account holders recover their assets, in an efficient, effective and predictable manner. Collective recovery processes start at the beginning of statutory administration, are furthered by deposit protection, allow for civil action, and end with bank liquidation. During the initial stages of statutory administration creditors often have limited access to their account balance and payment facilities. Depositor protection provides a maximum level of insurance for aggregate deposits held by eligible account holders. In essence, this means that all accounts held at the failed institution by a single creditor are covered by such claims, and both principal and interest are covered by the guarantee.

Small and partial repayments to eligible creditors during statutory administration are often boosted by a bullet payment made by a deposit protection scheme. The approval of these claims strengthens the position of the creditor in collective actions and alternative dispute resolution. This is because the bank and its regulator have already recognized the legitimacy of the creditor and his claim. In addition, verification of creditors with an account balance exceeding the insured limits whose DGS claim has already been approved is easier for an official liquidator. It cannot be stressed enough though, that maximum recovery for most creditors requires equally divided effort to all the individual stages of the resolution process.

How International Bank Account Holders Benefit from Collective Action

There are several weaknesses in the global financial system, hence the reason for a constant strengthening and improvement of the regulatory framework. Certain pitfalls are more significant than others. Privately owned financial institutions and the private banking sector are often the most affected by restrictions, penalties, and sanctions. If taken to an extreme, these measures may result in the failure, resolution, and eventually dissolution of the financial institution. Depositor discipline holds financial institutions accountable for their performance, while creditors are responsible for their investment decisions. Account holders often criticize this theoretical approach to bank failure and deposit protection as they are unaware of the excessive risks taken by the bank.

For international account holders, bank failure outside their home country is more than just an inconvenience. The alleged advantages of international financial centers and financial globalization do not come without disadvantages. An environment of inadequate regulatory resources and little financial oversight promotes unreasonable competition and indirect corporate growth. As a result, host countries can impose strict norms for foreign market entry, including financial regulation. Non-residents and foreign incumbents are particularly affected by this additional administrative and financial burden that also has an impact on bank failure, deposit protection and corporate dissolution.

Direct and indirect collective action can benefit international bank account holders, foreign creditors, and non-resident professionals affected by the default of their financial institution. This particular group of creditors is extra concerned when a bank in a foreign country fails. Lack of transparency and increased uncertainty then contribute to a perfect storm amplified by Murphy’s Law. Professional assistance can then remove fear and uncertainty, and ultimately ensure the repayment of the outstanding debt. The practical guidance Legal Floris LLC offers is based on long-standing industry experience in different jurisdictions, legal systems, and cross-border bank liquidation. To clarify, our comprehensive recovery services combine a global experience with a specialization in bank failure to provide cost-saving, results-based solutions. This is emphasized by the fact that our services are remunerated on the basis of no-cure no-pay when it comes to DGS claim filing procedures.

Specialization: Where corporate service providers and law firms provide a wide range of services, Legal Floris LLC exclusively serves creditors and victims of bank failures and investment fraud. Developed from our academic background in international economics, finance, and law, this specialization is built on our core competencies and includes resources, processes, and capabilities. In addition to these theoretical accolades, our experience handling complex cross-border bank failures and insolvencies allowed us to achieve significant victories and repayments for our clients.

Customer Selection: The failure of a financial institution must be handled carefully by creditors. Not only is money at stake, but there are also emotional and psychological consequences. The creditor must maintain confidence in the financial system and faith in their own abilities after a bank failure. Legal Floris LLC therefore selects its customers on specific criteria. We aim to keep our results-oriented services available to those creditors where we can really make a difference and who truly benefit from them.

Economies of Scale: Recovering account balances and other assets for creditors of failed banks requires skilled expertise. Submission of a DGS claim to a local deposit protection scheme is straightforward but mistakes can result in the rejection or disqualification of the claim. Therefore, our industry experience, administrative and operational efficiency, and low overhead allow for an affordable and effective claim filing procedure that saves creditors time, money and effort. While protecting the quality of our services and ensuring the desired outcome for our clients, the limits of economies of scale are determined by the number of clients we can handle per bank failure.

Global Experience and International Coverage: Over the years, Legal Floris LLC has assisted thousands of creditors and victims of bank failure around the world. In this global experience, our literacy allows us to apply what we have learned in novel bank failures and deposit guarantee claim filings. We understand industry jargon and have seen how individual regulators threaten deposit protection. As a result, we help our customers avoid administrative mistakes and omissions, learn from the past experiences of other creditors, and even leverage the know-how gained from other bank resolution situations.

Professional Network: Dedicated and highly skilled staff at Legal Floris LLC has extensive knowledge about global finance from an economic as well as legal perspective. Additionally, since we exclusively focus on the challenges of creditors from financial institutions, we have been able to build an extensive network of industry experts and other professionals who can assist us in complex matters. Our experience, background and professional network helps us to constantly compile an efficient, reliable and predictable recovery plan for individual bank failure. To ensure transparency, please find the professional profile of our founding member here.

Cost-Efficiency: In most cases, account holders caught up in the failure of their bank need their money back, but cannot afford to hire overly expensive legal representation. They are often willing to pay some fees to get their money back, but these fees must be reasonable. It is common for bank failures to affect a large number of account holders. To maintain a high service level and deliver the desired results, Legal Floris LLC increases efficiency and lowers costs per creditor by grouping several of these customers together.

Results-Based Guarantee: Astonished bank account holders are drawn to us because of the combination of our collective action and our results-based guarantee for the submission of their deposit guarantee claim. As discussed in detail in the article on ‘no cure no pay services’, Legal Floris LLC helps creditors to submit their DGS claim properly. In addition to saving time and money, eliminating stress and frustration and reducing other damages, Legal Floris LLC also lets their customer pay for our services after the DGS claim is honored and funds are available to the creditor again.

This is Not for Everyone…

Many thousands of account holders are affected by a typical bank failure. Due to the size of their deposits, some account holders are indifferent to repayment, while most creditors want to recoup exactly what they are owed. Deposit Guarantee Claim is a specialized service for creditors of supervised and licensed credit institutions participating in local deposit protection schemes. Despite our best efforts, we cannot represent all creditors and victims of bank failure who need to submit a deposit protection claim. This limitation is mainly due to the time constraints imposed by local regulations and the complexity of the claim submission process.

Our services package is best fit to non-resident creditors of privately owned financial institutions that are closed for regulatory violations rather than direct financial challenges. If this applies to your situation and you want to avoid missing out on deposit protection repayments, want to get things done quickly, and wish to pay reasonable fees for recovery, do not hesitate to contact us.