Judicial proceedings pending before the courts may not be enough to settle all Berardo's debts to CGD, BCP and Novo Banco, compared to the last valuation of the Berardo Collection works at around 300 million euros. 500 million. Even if a large part of the debt can be liquidated, it does not mean that the assets of the executives (Berardo and associated entities) are limited to the pledge on movable assets such as shares, bonds, deposits and participations, among others .
Source close to the process admits that the attachment of other types of assets, particularly in the personal wealth of Joe Berardo, may be in the target of justice if it is recognized the insufficiency between the value of the property to be pledged and the debt, which rises to 962 million.
Apart from the summary execution that was filed at the Lisbon Court, there is still another action in the Court of Funchal, worth 44 million euros, in which the only one executed is Joe Berardo. In question is an ordinary execution, which was brought to justice on April 11, in which the case is sent to the court to order a preliminary injunction, and if there is no serious irregularity, it follows for the summons of the executed, prior to the garnishment. When the businessman is summoned he will have 20 days to deduct opposition, to pay or to give security. Only after that, the executing agent will investigate the assets of the one who is appointed as one of the richest businessmen in Portugal, but whose only asset he will have in his name today is a garage in Madeira.
In the summary process, there is no place for the injunction. In this case, the attachment is carried out and only then is the summons of the executed person informed that an executive action has been brought against him and inviting him to the defense, through opposition to execution (foreclosure) or opposition to attachment.
Debt forgiveness agreement with banks can be resumed
As part of the litigation process, CGD, BCP and Novo Banco attempted to reach an agreement with Berardo that would allow the parties involved to minimize losses. The proposal presented by the three financial institutions focused on the Berardo Foundation and the collection of works of art of the Madeiran entrepreneur. And it implied that BCP, Novo Banco and CGD would accept a significant forgiveness of Berardo's debt. But the lawsuit came to an end on April 20 this year after failing to reach agreement with the three banks earlier this year. In addition to the commander, three connected entities are targeted: Metalgest, the José Berardo Foundation and Moagens Associadas.
Source close to the process, however, admits that, as a result of this implementation process, the debt forgiveness agreement with the banks can still be resumed in view of the high liabilities of the Berardo Foundation – at the end of 2017, it had a financial EUR 517 million. This entity risks insolvency by a creditor, in a process in which greater pressure on the sale of assets may result in a lower valuation of works of art. It is against this risk that Joe Berardo may see advantages in resuming negotiations with the bank in order to forgive debt.
For now, in the face of Berardo's refusal, the banks chose to follow the judicial route, in a strategy that has also been identified as having associated high risks. At his hearing in Parliament, Eduardo Paz Ferreira, in Parliament's parliamentary inquiry committee on the management of Caixa, said that this attempt to recover entrepreneurial credits is a "kamikaze operation". This is because, he stressed, it is "extremely difficult" to reach the heritage of the Madeiran businessman.
Joe Berardo has contracted about € 350 million in financing to buy BCP shares, giving them the same title. Subsequently, with the financial crisis in 2008, and already with an overdraft of 200 million (about 60% of the debt), the public bank demanded the reinforcement of guarantees, with additional pledge of BCP and PT bonds. And a pledge of Berardo Collection Association (ACB) bonds.
Article published in issue no. 1988, of May 10, Jornal Econômico