Judgment;Abstract — ECLI:EU:T:2023:733
Date: 2023-11-22
Language of the case: English
Court formation: Third Chamber, Extended Composition
Subject matter: Economic and monetary policy
Procedure: Action for annulment - unfounded
Origin: United Kingdom;Ireland;Italy;Luxembourg

summary of the strategy applied by the Valuer for the realisation of Banco Popular’s assets, according to which the ‘performing loans portfolio … will be run-off until the end of the liquidation period, taking into account their yield, a significant increase of the prepayment rate and new delinquencies, followed by a final sale of the remaining book’. 180 It follows that the Valuer referred to a significant increase in the prepayment rate of performing loans, not in new delinquencies in respect of the remaining performing loans. 181 Therefore, it is sufficient to state, as the SRB noted, that that argument made by the applicants is based on a misreading of Valuation 3. 182 Accordingly, the third complaint must be rejected. (4) The fourth complaint, relating to the discount rate on the sale of the remainder of the performing loans portfolio 183 The applicants observe that, in the context of the hypothetical seven-year liquidation scenario, the Valuer applied a discount rate on the sale of the remainder of the performing loans portfolio (the ‘rump’) of between 5.1% in the best-case scenario and 6.1% in the worst-case scenario, without explaining the 1% difference. 184 In Valuation 3, the Valuer stated that the discount rate used at the end of the liquidation timeframe in each scenario reflected the required return rates in the Spanish market for each asset class based on the forecast risk profile at the time of liquidation, which required some adjustments. The Valuer set out the factors on which it based those adjustments. It explained that the changing discount rates used in the different liquidation scenarios reflected the evolving mix of the different asset classes in the portfolio and their respective assumed discount rates. 185 It is sufficient to note that those explanations, which are not disputed by the applicants, provide ample justification for taking into account distinct discount rates on the sale of the remainder of the performing loans portfolio in the best-case scenario and the worst-case scenario for each alternative timeframe. 186 Furthermore, as regards the applicants’ reference to their expert report, assuming a 5% maximum discount rate, it should be recalled that, as is apparent from paragraphs 66 to 70 above, a comparison with the analysis carried out in the applicants’ expert report is not relevant for the purpose of determining whether the Valuer made manifest errors of assessment in Valuation 3. 187 It follows that the fourth complaint must be rejected. 188 It is apparent from the analysis of the second part of the present plea that the applicants have not raised arguments such as to make implausible the Valuer’s assessments relating to the valuation of Banco Popular’s non-performing loans portfolio. They have therefore not established that the SRB made a manifest error of assessment in relying on those assessments in the contested decision. 189 Accordingly, the second part of the present plea must be rejected. (c) The third part, concerning the valuation of the non-performing loans 190 The applicants claim that the recovery estimate in respect of non-performing loans in Valuation 3 is based on inconsistent and unsubstantiated assumptions and is irreconcilable with the benchmark data, which resulted in understated recovery estimates. 191 In the first place, the applicants dispute the assumption in Valuation 3 that all non-performing loans would be sold within 18 months of the liquidation. They maintain that the secured non-performing loans portfolio mostly comprises real estate collateralised loans and that its value is therefore driven by the value of the underlying real estate asset. They submit that, while acknowledging in Valuation 3 that the main driver for the valuation of secured non-performing loans is the recovery of amounts from the sale of the repossessed assets, the Valuer had an inconsistent approach in assuming a different optimal disposal period for non-performing loans and for real estate assets. 192 In Valuation 3, the Valuer stated that the planned liquidation strategy consisted in selling the non-performing loans portfolio as soon as possible to prevent further deterioration in the bank’s position and given the ‘appetite’ in the Spanish market for such assets, and that this was consistent with experience in other bank liquidations. It considered that non-performing loans would be assumed to be sold in December 2018, approximately 18 months after the resolution date, in the three alternative scenarios of 18 months, 3 years and 7 years. 193 Following comments from the affected shareholders and creditors during the right to be heard process, arguing that a longer timeframe for the disposal of non-performing loans would yield higher sales proceeds, the Valuer stated, in the Clarification Document, that the assumption that Banco Popular would retain non-performing loans for a longer timeframe had been considered when preparing Valuation 3. However, it maintained that a timetable for the disposal of the non-performing loans portfolio over a period of 18 months remained the most appropriate. 194 In that regard, the Valuer considered that, over a longer timeframe, greater recoveries would be uncertain, while the costs of retaining the work-out team (taking into account the risk around key personnel leaving, which would increase the level of potential inefficiencies), and other factors such as the reluctance of defaulted borrowers to enter into discussions with an insolvent bank, were more certain. In addition, the Valuer stated that a longer timeframe also increased the macroeconomic risk, in particular because there was an active market for non-performing loans in the second half of 2017 and the Valuer considered it unlikely that a liquidator would want to speculate on favourable conditions continuing for a lengthy period of time (particularly against a background of possibly significant macroeconomic dislocation which could follow Banco Popular’s liquidation). It was therefore concluded that a relatively short-term sale was ultimately more beneficial and would not result in buyer capacity issues which would impact on the level of realisations achieved. 195 In the contested decision, the SRB referred to those explanations given by the Valuer and approved them. 196 Furthermore, it should be noted that, in the Clarification Document, the Valuer explained that, as regards the methodology used in Valuation 3, it had adopted a dynamic scenario, understood as a method that sets different moments of realisation during the liquidation and subsequently establishes a value of the asset based, inter alia, on the time of realisation. Thus, it stated that, for each of the alternative time scenarios, it had considered the optimal strategy and disposal period to maximise realisations for the different asset classes, according to their underlying nature and liquidity. 197 The applicants have not put forward any arguments capable of calling that methodology into question. 198 Thus, even though 66.6% of Banco Popular’s non-performing loans portfolio was secured by real estate assets, those loans and the real estate assets do not belong to the same asset class and their disposal in the context of a liquidation does not follow the same strategy. 199 The fact that the value of the secured non-performing loans is backed by the value of the real estate collateral is, admittedly, the main factor in their valuation. However, it is irrelevant to the question of which period of time is the most appropriate for maximising recovery in respect of those loans. 200 Therefore, the applicants cannot claim that there is an inconsistency in the different disposal periods taken into account for non-performing loans and for real estate assets. 201 The applicants have not put forward any arguments capable of calling into question the explanations provided in the Clarification Document, referred to in paragraph 194 above, indicating the reasons why maximising recovery in respect of those loans meant disposing of them quickly once liquidation had begun. 202 The applicants, in arguing that a longer disposal period would have allowed for greater recoveries, merely point to alleged differences in the Valuer’s approach between the disposal of the non-performing loans portfolio and the disposal of the real estate assets as regards macroeconomic risks, or state that their experts have a different opinion on the costs of maintaining the non-performing loans portfolio and on the reluctance of defaulted borrowers to negotiate. However, neither the comparison with the valuation of the real estate assets nor the comparison with the assessments in their expert report is capable of establishing that the Valuer made a manifest error of assessment in taking into consideration a disposal period of 18 months. 203 In the second place, the applicants maintain that the recovery estimate in respect of non-performing loans is inconsistent with the benchmark data. They claim that the internal rate of recovery (IRR) of 16% applied by the Valuer in Valuation 3 is unduly high, which has the consequence of driving down the price of the non-performing loans portfolio. 204 The applicants submit that the Valuer dismissed actual market data on the IRR, on the basis of the ‘lesser quality’ of the disposal process and the liquidator’s inability to ‘provide representations and warranties’. According to the applicants, those statements assume that the liquidation would be mismanaged by the liquidator in breach of the requirements of Law 22/2003. Moreover, market studies carried out by their experts show that the lack of representations and warranties has a limited impact on the IRR. 205 In Valuation 3, the Valuer stated the following: ‘IRR: we have assumed that the distressed investors interested in this type of portfolio [of secured non-performing loans] would require IRRs of between 16% in the high case and 20% in the low case which are higher than we are observing in the market due to the fact that a sale of [a non-performing loans portfolio] in a liquidation scenario would have to factor in: – Expected lesser quality of the processes and information provided to the potential buyers; – Inability of the seller (the liquidator) to provide representations and warranties in the Sales and Purchase Agreement.’ 206 It is sufficient to note that the Valuer did not state that the lack of information was attributable to the liquidator or that it assumed any mismanagement by the liquidator. Moreover, the applicants merely reiterate an opinion expressed by their experts following alleged market studies carried out by them, without giving any further details as to the nature of those studies or their results. Accordingly, those arguments must be rejected. 207 Furthermore, as the SRB notes, actual market data cannot serve as benchmark data in hypothetical insolvency proceedings and will require adjustments in order to take account of the challenges, in particular administrative challenges, involved in liquidation. 208 It follows that the applicants have not established that the SRB and the Valuer made a manifest error of assessment with regard to the valuation of the non-performing loans. 209 It is apparent from the analysis of the third part of the present plea that the applicants have not raised arguments such as to make implausible the Valuer’s assessments relating to the valuation of Banco Popular’s non-performing loans portfolio. They have therefore not established that the SRB made a manifest error of assessment in relying on those assessments in the contested decision. 210 Accordingly, the third part must be rejected. (d) The fourth part, concerning the valuation of the real estate assets 211 The applicants claim that the Valuer’s valuation of the real estate assets indirectly owned by Banco Popular is based on inconsistent assumptions and that the SRB made manifest errors of assessment that resulted in understated recovery estimates relating to those assets. 212 They submit that the Valuer’s assumption that the real estate assets indirectly owned by Banco Popular, namely real estate subsidiaries, would be disposed of within an accelerated period of 18 months regardless of the liquidation scenario considered, is at odds with its assessment of the real estate assets directly owned by Banco Popular, the disposal of which would be spread over the entire liquidation period in order to maximise recoveries. 213 The applicants also submit that the Valuer did not quantify, and the SRB did not consider, recoveries achievable over a longer disposal period corresponding to the disposal period taken into account for the real estate assets directly owned by Banco Popular. Relying on their expert report, they dispute the reasons, put forward by the Valuer in the Clarification Document, for which it considered that a longer disposal period for real estate subsidiaries did not make it possible to maximise recoveries. 214 In the contested decision, the SRB noted that some affected shareholders and creditors had argued, during the right to be heard process, that the Valuer’s proposed liquidation strategy for real estate subsidiaries was inappropriate and inconsistent with the information detailed in Valuation 3 relating to the real estate assets directly owned by Banco Popular. They had alleged that realisations would be maximised through an orderly disposal of assets over the entire liquidation period and that the 18-month period had been unnecessarily accelerated, resulting in a significant understatement of recoveries. 215 The SRB stated that, as explained in the Clarification Document, for real estate subsidiaries, the Valuer had considered that the going concern sales of the real estate subsidiaries within the first 18 months of the liquidation was the optimum realisation strategy. The SRB noted that considering the real estate subsidiaries as ongoing companies and not simple property owners allowed those subsidiaries to be realised, once sold, in a quicker and more orderly way, without distressed property prices or saturating market capacity. It added that, while the Valuer considered alternative strategies, including for Banco Popular to retain the entities and work out the assets itself or to phase the disposals over a longer period, such strategies would have entailed a more capital-intensive and complex process and additional costs and risks that the liquidator would be reluctant to accept, without certainty to achieve higher recoveries. 216 In that regard, in the Clarification Document, the Valuer set out the reasons why it had not adopted, in Valuation 3, a strategy for disposing of the real estate subsidiaries over a longer period. The Valuer stated the following: ‘When preparing [Valuation 3], we considered alternative strategies, including for [Banco Popular] to retain the entities and work the assets out itself over a longer period or to phase the disposals over a longer period; however, this would have been a potentially more capital-intensive and complex process to manage – in particular considering [Banco Popular]’s liquidation. Specifically, pending asset disposals, the entities could require funding, moreover, in the context of [Banco Popular]’s failure and [the] potential macro-economic impact on asset values[,] such a strategy would expose the Liquidator to additional risk (including from an operational perspective) which, in our opinion, the Liquidator would be reluctant to accept. Moreover, given the additional costs and risks, we considered that a longer period of time for the sale of these entities would potentially negatively impact the realisable amount, given the potential impact of a liquidation process of the parent [company] [on] the management of these entities. Furthermore, the non-sale of real estate subsidiaries until the end of the liquidation timeline would entail higher liquidation costs, as well as higher management and maintenance costs, and not necessarily higher recoveries.’ 217 It follows that the Valuer explained that, in so far as it had considered the disposal of Banco Popular’s real estate subsidiaries as going concerns and not as indirectly owned real estate assets, disposal over a period longer than 18 months did not allow for a maximisation of recoveries. 218 In that regard, the applicants state that the justifications put forward by the Valuer applied both to the real estate assets indirectly owned by Banco Popular and to those directly owned by it. They dispute the assumption that the management of the indirectly owned real estate assets would entail additional costs, in so far as, according to their experts, the liquidator would have benefited from the expertise of the real estate subsidiaries which would have assisted the liquidator in managing the risk associated with the real estate assets. They state that they are unaware of the specific funding needs referred to by the Valuer. 219 It should be noted that those arguments are not sufficient to call into question the explanations provided by the SRB and the Valuer that a disposal, over a longer period, of the real estate subsidiaries as indirectly owned real estate assets would increase both the costs associated with the operation of those subsidiaries and the liquidation costs, as well as the risks, taking into account in particular the likelihood of saturation of the property market, and therefore did not allow for the maximisation of recoveries. 220 Moreover, the applicants’ arguments do not establish that the Valuer made a manifest error of assessment in considering the disposal of Banco Popular’s real estate subsidiaries as going concerns. The fact that, according to their expert report, another strategy was conceivable, namely the disposal of those subsidiaries as indirectly owned real estate assets, is not sufficient to make the assumption adopted by the Valuer implausible. 221 In that regard, it must be borne in mind that, as stated in paragraphs 196 and 197 above, the applicants do not dispute the valuation methodology adopted by the Valuer, according to which it considered the optimal strategy and disposal period to maximise realisations for the different asset classes, according to their underlying nature and liquidity. 222 Thus, the applicants cannot validly maintain that taking different disposal periods into account for two different asset classes, namely real estate subsidiaries as going concerns and immovable assets directly owned by Banco Popular, is contradictory. 223 In addition, in so far as the Valuer explained why the disposal of the real estate subsidiaries as indirectly owned real estate assets did not make it possible to achieve higher recoveries, the applicants are incorrect in claiming that it did not quantify the recoveries resulting from such an assumption. 224 Last, it should be noted that the applicants’ arguments and the expert report on which they rely, seeking to establish that the Valuer should have considered a longer disposal period, are based on the assumption that the real estate subsidiaries are disposed of as real estate assets indirectly owned by Banco Popular. Those arguments are therefore not capable of calling into question the Valuer’s assessment of the disposal period for real estate subsidiaries as going concerns. 225 In that regard, it should be noted that the applicants do not claim that, in the event of a disposal of Banco Popular’s real estate subsidiaries as going concerns, it would be incorrect to take into account an 18-month disposal period. 226 It follows that the applicants have not put forward any arguments such as to make the Valuer’s assessments relating to the valuation of Banco Popular’s real estate subsidiaries implausible. They have therefore not established that the SRB made a manifest error of assessment in relying on those assessments in the contested decision. 227 Accordingly, the fourth part must be rejected. (e) The fifth part, concerning the valuation of the legal contingencies 228 The applicants claim that the estimate of the legal contingencies, in Valuation 3, in a very wide range from EUR 1.8 billion in the best-case scenario to EUR 3.5 billion in the worst-case scenario, stems from errors of law and manifest errors of assessment and led to an arbitrary overestimation of the provisions for legal contingencies and a reduction in the level of recoveries. 229 In Valuation 3, the Valuer set out its general approach to the valuation of the legal contingencies. It stated that it had reviewed Banco Popular’s financial statements and considered, together with the bank’s internal legal team, whether the estimates should be revised or whether additional claims could arise in the event of the bank’s liquidation. It explained that it recalculated the legal contingencies included in the financial statements using its own assumptions based on the information provided by the bank and to reflect existing legal precedent where appropriate. It noted that the declaration of insolvency did not prevent the parties from lodging new claims and that, indeed, its experience of other situations suggested that potentially material and hitherto unforeseen additional claims could arise in a liquidation scenario as clients, creditors or shareholders seek to maximise their recovery prospects. It also stated that, as with any legal proceeding, it was not possible to predict how the courts would view the claims received, especially such claims as were then purely hypothetical. In those circumstances, it considered that its analysis could represent a conservative assessment of potential legal contingencies for valuation purposes. 230 As regards the methodology and assumptions used, the Valuer explained that it had assumed that the main legal contingencies were included in Banco Popular’s financial statements and that it had reviewed the assumptions made by the bank and recalculated the potential amount which could be claimed. It stated that it had included in its analysis the existing risk attaching to capital increase claims in a liquidation scenario, based on its knowledge of the sector. 231 The Valuer then explained the method it had used to assess each category of legal contingencies, namely floor clauses in mortgage loans, mandatorily convertible notes, mortgage loan expenses, Banco Popular’s capital increases in 2012 and 2016, and real estate development bank guarantees. 232 In the first place, the applicants claim that the Valuer’s approach is inconsistent with Spanish law. They maintain, relying on A’s witness statement annexed to the application, that, in normal insolvency proceedings under Spanish law, the liquidator does not ordinarily make provisions for pending or potential claims against the entity in liquidation. According to the applicants, Spanish law avoids the liquidator speculating on the outcome of claims that have not yet materialised, so as not to prejudice existing creditors. The liquidator could, exceptionally, make provision for the value of a pending claim that has already been filed if he or she considered it very likely that the claim would succeed, but, in line with the liquidator’s obligation to maximise returns for existing creditors, he or she would not value any claims that have not yet been filed. 233 In that regard, it is sufficient to note that that argument made by the applicants is based on mere statements made by their witness, A, who does not expressly refer to any provision of Spanish legislation. 234 In addition, as noted by the SRB, Article 87(4) of Law 22/2003 provides: ‘When the insolvency court considers fulfilment of the termination condition or confirmation of the contingent claim to be likely, the court may, at the request of one of the parties, adopt precautionary measures for provisions to be made in respect of the estate, for securities to be lodged by the parties and any other measure which it considers appropriate in each individual case.’ 235 It follows that, contrary to what the applicants maintain, Law 22/2003 does not limit the possibility for the liquidator to take claims into account to the exceptional case where he or she considers that it is ‘very likely’ that they will succeed. 236 In the second place, the applicants maintain that the Valuer recalculated the amount of the provisions for legal contingencies already provided for in Banco Popular’s financial statements not on the basis of the claims already filed but on the basis of its own experience or its own assumptions. According to the applicants, that does not constitute sufficient reason to depart from Banco Popular’s financial statements. Although the Valuer stated in Valuation 2 that a legal opinion was necessary in order to assess the probability of success of claims, there is nothing in Valuation 3 to indicate that it obtained such an opinion. 237 First, it should be noted, as observed by the SRB in the contested decision, that the Valuer stated, in Valuation 3 and in the Clarification Document, that it had consulted Banco Popular’s legal team and examined with it whether the estimates in the bank’s financial statements should be revised or whether additional claims could arise in the event of liquidation. 238 In addition, it is apparent from Valuation 3 that the Valuer relied on the applicable Spanish legislation in order to carry out the valuation. The applicants do not dispute that the Valuer possessed the ability required to carry out Valuation 3 effectively within the meaning of point 1 of Article 38 of Delegated Regulation 2016/1075, which includes ability in legal matters. 239 Therefore, the applicants cannot maintain that an additional legal opinion was necessary to carry out Valuation 3. 240 Second, as regards the fact that the Valuer’s estimates differed from the level of the provisions in Banco Popular’s financial statements, the SRB noted, in the contested decision, that it was apparent from the Clarification Document that the accounting criteria followed by Banco Popular for the calculation of the provisions of legal contingencies on a going concern basis did not apply in the context of insolvency proceedings. 241 In that regard, the Valuer explained in the Clarification Document that the accounting criteria followed by Banco Popular for the calculation of provisions of legal contingencies, outside of the insolvency proceeding, were different to those followed for the calculation to be carried out in a liquidation scenario and that the accounting criteria did not apply in insolvency. In addition, it stated that the creation of an accounting provision did not establish specific rights within the creditor hierarchy in a liquidation and did not provide a preference to those creditors to recover any amount. It stated that, accordingly, the levels of provisions calculated by Banco Popular in its financial statements would likely be different, as Banco Popular’s level of provisions did not reflect a liquidation scenario. 242 Moreover, the Valuer also stated that the opening of normal insolvency proceedings could result in additional claims that could be lodged by creditors seeking to maximise their recoveries before the end of the liquidation. 243 It follows that the Valuer gave sufficient reasons for departing from Banco Popular’s financial statements and relying on its own estimates in Valuation 3 to assess the legal contingencies in a liquidation scenario. 244 In the reply, the applicants claim that the Valuer failed to substantiate its claim that the estimates for legal contingencies would be higher in the case of an insolvency than in the case of a going concern. According to their experts, the estimate would be expected to be lower in an insolvency. 245 It is sufficient to note that, in addition to the explanation referred to in paragraph 242 above, the Valuer had indicated in Valuation 3 that liquidation proceedings typically resulted in significant litigation and claims based on hypotheses that were difficult to anticipate in advance. As stated in paragraph 229 above, it explained that, in its experience, potentially material and hitherto unforeseen additional claims could arise in a liquidation scenario, with the aim of maximising recovery prospects. 246 In addition, in Valuation 3, the Valuer provided specific explanations concerning the likelihood of an increase in claims for each category of legal contingencies. For example, with regard to floor clauses in mortgage loans, it took into account the entry into force of new consumer protection legislation in 2018. 247 It follows that the Valuer gave sufficient reasons for estimating provisions for legal contingencies that were higher in Valuation 3 than those resulting from Banco Popular’s financial statements. 248 In the third place, the applicants dispute the estimates of provisions for legal contingencies in respect of Banco Popular’s capital increases in 2012 and 2016. 249 In Valuation 3, the Valuer recalled that Banco Popular had undertaken two capital increases, in November 2012 and May 2016, each for EUR 2.5 billion. It noted that the Bankia case was a precedent for how shareholders might look back to potential errors or omissions in the original capital raise prospectus as grounds for a claim which, if successful, would allow the shareholder to recover damages against the bank. In order to assess the potential claims, it explained that it had, inter alia, taken into consideration the period of time that had elapsed, stating that the limitation period in respect of the 2012 capital increase had not expired, as well as the profile of investors based on available public information and the shareholding structure provided by Banco Popular. 250 In the contested decision, the SRB noted that some affected shareholders and creditors had commented that the claims relating to the 2012 capital increase were highly unlikely given the time that had passed. It stated that, in the Clarification Document, the Valuer had considered that, while potentially less likely compared to the claims relating to the 2016 capital increase, the possibility of such claims could not be entirely ruled out. In particular, according to the Valuer, claims regarding Banco Popular’s 2012 capital increase could arise in relation to potential errors or omissions in the original capital increase prospectus and that possibility could not be ruled out because the limitation period had not yet expired. The SRB stated that, therefore, the Valuer had concluded that, although claims relating to the 2012 capital increase were highly unlikely given the time that had passed, they could not be excluded. 251 It should be noted that, in the Clarification Document, the Valuer stated that it had assumed zero claims when it established the best-case scenario regarding the valuation of the provisions for legal contingencies. 252 First, as regards the legal contingencies associated with the 2016 capital increase, the applicants state that their experts concluded that a fair, prudent and reasonable provision amounted to EUR 1.1 billion on the basis of the estimate made by Ernst & Young on behalf of Bankia and the estimate made by Banco Santander. 253 It is sufficient to note that, in accordance with paragraphs 67 to 70 above, that argument, by which the applicants merely refer to the calculation made in their expert report, is not relevant for the purpose of establishing that a manifest error of assessment was made in Valuation 3. 254 Second, the applicants claim that, in the best-case scenario and worst-case scenario, the amount of the legal contingencies associated with the 2012 capital increase should be zero, given that the claims were highly unlikely given the time that had passed and that, according to A’s witness statement, a liquidator would not be permitted to make provision for such claims. 255 In that regard, it is sufficient to recall that, as is apparent from paragraphs 234 and 235 above, the liquidator may take potential claims into account and that that argument has already been rejected. 256 The applicants have not put forward any arguments capable of calling into question the explanations provided by the Valuer and approved by the SRB, referred to in paragraph 250 above, as to why claims relating to the 2012 capital increase could still arise after the liquidation of Banco Popular. 257 In that regard, the fact, noted by the applicants, that the Valuer acknowledged, in the Clarification Document, that the possibility of claims arising in relation to the 2012 capital increase was less likely than for the 2016 capital increase is not sufficient to call into question the plausibility of the Valuer’s assumption that claims relating to the 2012 capital increase could not be entirely ruled out. 258 Furthermore, the applicants cannot maintain that the amount of the provision for legal contingencies relating to the 2012 capital increase taken into account in Valuation 3 in the worst-case scenario was substantial and manifestly incorrect by comparing the total amount of the provisions for legal contingencies in the best-case scenario and the worst-case scenario set out in Valuation 3. That total amount includes the assessment of all the categories of legal contingencies referred to in paragraph 231 above. 259 Accordingly, the applicants have not put forward any argument such as to make implausible the Valuer’s estimate that the amount of the provisions for legal contingencies relating to the 2012 capital increase might not be zero in the worst-case scenario. 260 In the fourth place, for the first time in the reply, the applicants claim that, according to Banco Santander’s 2020 financial statements, the provision in respect of floor clauses made by Banco Popular in its financial statements was correct and that the increase in that provision made by the Valuer was not justified. 261 It is sufficient to note, as observed by the SRB, that that argument relating to floor clauses was raised for the first time at the stage of the reply and that, since it is not an amplification of a plea set out in the application and the applicants have not put forward any matter of law or of fact which came to light in the course of the procedure, it is inadmissible pursuant to Article 84(1) of the Rules of Procedure. In any event, that argument, based on matters of fact that occurred subsequently to the contested decision, cannot call into question the plausibility of the assumptions made by the Valuer in Valuation 3. 262 Furthermore, the applicants are requesting that the Court adopt measures of inquiry requiring the SRB to enable the Court to verify the file and implement appropriate safeguards to enable the applicants’ representative to examine it. 263 It is important to note in that regard that, to enable the Court to determine the usefulness of measures of organisation of procedure, the party requesting them must identify the documents requested and provide the Court with at least minimum information indicating the utility of those documents for the purposes of the proceedings (see judgments of 28 July 2011, Diputación Foral de Vizcaya v Commission, C‑474/09 P to C‑476/09 P, not published, EU:C:2011:522, paragraph 92 and the case-law cited, and of 20 March 2019, Hércules Club de Fútbol v Commission, T‑766/16, EU:T:2019:173, paragraph 29 and the case-law cited). 264 It is sufficient to note that the applicants do not specify what the information they are requesting is or what its utility would be. It must be held that the applicants’ request is not sufficiently precise and should therefore not be granted. 265 It follows that the applicants have not put forward any arguments such as to make implausible the Valuer’s assessments relating to the valuation of the legal contingencies. They have therefore not established that the SRB made a manifest error of assessment in relying on those assessments in the contested decision. 266 Accordingly, the fifth part of the present plea must be rejected. 267 To conclude the first plea, the applicants claim that their right to property has been infringed. They maintain that it is apparent from their arguments set out in the five parts of that plea that the finding in the contested decision that no compensation is due to them does not amount to fair compensation. According to the evidence that they provided, they would have received full recovery, or at least a substantial part, of their bonds in normal insolvency proceedings. 268 Since the five parts of the first plea have been rejected, it is sufficient to note that the applicants have not established that the SRB made a manifest error of assessment in deciding not to award them compensation. They cannot therefore validly maintain that that decision infringes their right to property. 269 It follows that the first plea must be rejected. 3. The second plea, alleging that the SRB made a manifest error of assessment in appointing the Valuer as an independent valuer 270 The applicants claim that the SRB made a manifest error of assessment or an error of law in appointing the Valuer to carry out Valuation 3 in breach of Article 20(16) of Regulation No 806/2014. First, they submit that the SRB did not examine whether the Valuer was independent. Second, they maintain that, in any event, the Valuer was not an independent valuer for the purposes of Article 38 of Delegated Regulation 2016/1075. (a) The first part, alleging that the SRB did not examine whether the Valuer was independent 271 The applicants claim that the SRB delegated to the Valuer itself the duty to check whether the Valuer was independent, in breach of Article 41 of Delegated Regulation 2016/1075. The SRB did not give details regarding the internal conflict checks which it had asked the Valuer to undertake, or the sufficient safeguards that the Valuer had purportedly applied, the professional standards it allegedly followed, or the oversight that the SRB retained to ensure that no actual or potential material interests arose that could influence or be reasonably perceived to influence the Valuer’s judgement in the process. 272 In accordance with Article 20(16) of Regulation No 806/2014, the SRB is to ensure that a valuation is carried out by an independent person referred to in paragraph 1 of that article, namely by a person independent from any public authority, including the SRB and the national resolution authority, and from the entity concerned. 273 During the procurement procedure that led to the award of the specific contract referred to in paragraph 4 above to the Valuer, on 18 May 2017 the Valuer provided the SRB with a declaration of absence of conflict of interest with Banco Popular. On 22 May 2017, the Valuer provided a declaration of absence of conflict of interest in its ‘Proposal for provision of advice and assistance on economic and financial valuation under Lot 2 (SRB/OP/1/2015)’ in which it referred to the services it had provided to Banco Popular. 274 On 23 May 2017, on the date of its appointment as a valuer, it also produced a declaration concerning its independence in accordance with Delegated Regulation 2016/1075, in which it stated, inter alia, that it was aware of the legal requirements and that the appropriate arrangements had been made where necessary in order to ensure that neither it nor any member of the team proposed to perform the specific contract had any material interest as defined in Article 41 of Delegated Regulation 2016/1075. It undertook to put in place all the necessary arrangements to ensure that any future services provided to the other parties would not compromise its independence. It noted that any addition of new members to its team would be subject to compliance with the independence requirements and to the SRB’s approval. 275 After its appointment as a valuer, on 21 September 2017 and 11 April 2019 the Valuer provided additional declarations concerning its independence following the addition of new members to the team working on Valuation 3. 276 In addition, on 18 December 2019, at the request of the SRB following comments from the affected shareholders and creditors during the right to be heard process, the Valuer submitted a further declaration of absence of conflict of interest. It confirmed that, on 15 November 2019, based on its systems and controls, it was and had been independent for the purposes of Valuation 3 and that it was not aware of any conflicts with other work it had performed, nor any individual conflicts. It indicated, inter alia, the services which it had provided to Banco Santander and stated that there was no link between those services and the services provided to the SRB for the purpose of drawing up Valuation 3 or the Clarification Document. It added that it had not provided services relating to valuation or financial reporting of the assets or liabilities that were the subject of Valuation 3. 277 In the contested decision, the SRB considered that the Valuer was independent in accordance with the requirements of Article 20(1) of Regulation No 806/2014 and Chapter IV of Delegated Regulation 2016/1075. It noted that the Valuer had been selected through a public procurement procedure, following which the SRB considered that it possessed the necessary qualifications, experience, ability, knowledge and resources to carry out Valuation 3, without undue reliance on any relevant public authority or Banco Popular, in accordance with the requirements of point 1 of Article 38 and Article 39 of Delegated Regulation 2016/1075. The SRB concluded that the Valuer – taking into account the nature, size and complexity of the valuation to be performed – held such human and technical resources as appropriate to carry out Valuation 3, in accordance with Article 39(2) of Delegated Regulation 2016/1075. 278 Moreover, the SRB considered that the Valuer was a legal entity independent from public authorities and from Banco Popular and, in that regard, that it was fully independent from the SRB and had not been engaged for the annual accounting work of Banco Popular. 279 Last, the SRB noted that, with regard to the absence of actual or potential material common or conflicting interests, as required by Article 41 of Delegated Regulation 2016/1075, the Valuer had undertaken an internal check in accordance with the applicable professional standards. Based on the outcome of that check, the Valuer considered that it had no conflict of interest in respect of its appointment as an independent valuer. In that regard, the SRB referred to the various declarations of absence of conflict of interest provided by the Valuer during the procurement procedure and after its appointment, intended to guarantee its independence and that of the members of its teams, in particular the team tasked with carrying out Valuation 3. 280 Based on those declarations and assurances provided by the Valuer, the SRB considered that the Valuer applied sufficient safeguards to avoid any actual or potential material interest in common or in conflict with any relevant public authority or Banco Popular arising. It concluded that the Valuer was independent in accordance with the requirements of Article 20(16) of Regulation No 806/2014 and Articles 39 to 41 of Delegated Regulation 2016/1075. 281 Furthermore, in Section 6.2.1 of the contested decision, entitled ‘Comments related to the independence of the Valuer’, the SRB specifically responded to the comments of the affected shareholders and creditors relating to the Valuer’s lack of independence vis-à-vis Banco Santander and Banco Popular and to the fact that it had carried out Valuation 2. That section of the contested decision contains the SRB’s detailed reasoning explaining that the Valuer, when it was appointed and while it was conducting Valuation 3, did not have any actual or potential material interest in common or in conflict within the meaning of Article 41 of Delegated Regulation 2016/1075. 282 It is thus apparent from the contested decision that the SRB examined the various declarations of absence of conflict of interest sent by the Valuer and referred to in paragraphs 273 to 276 above, which contained, inter alia, a description of the services provided by the Valuer to Banco Popular and to Banco Santander. In addition, it is apparent from the declaration of absence of conflict of interest of 18 December 2019 that it had been produced by the Valuer at the request of the SRB following certain comments from the affected shareholders and creditors in order to provide additional information as to whether there was a possible conflict of interest in the light of the services provided to Banco Santander. 283 It follows that, throughout the procedure relating to the resolution of Banco Popular, the SRB ensured, as it was required to do, that the Valuer complied with the requirements of independence and, in particular, those relating to the absence of a conflict of interest laid down in Article 41 of Delegated Regulation 2016/1075. 284 Furthermore, contrary to what is claimed by the applicants, the contested decision contained sufficient information to determine the requirements and procedures used by the SRB to verify the independence of the valuer. 285 In that regard, the applicants request that the Court adopt a measure of inquiry requiring the SRB or the Valuer to provide information clarifying the relationship between the Valuer and Banco Popular and Banco Santander. 286 It is sufficient to recall that, as regards applications made by a party for measures of organisation of procedure or measures of inquiry, the Court is the sole judge of any need to supplement the information available to it in respect of the cases before it (see judgments of 4 March 2021, Liaño Reig v SRB, C‑947/19 P, EU:C:2021:172, paragraph 98 and the case-law cited, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 435 and the case-law cited). 287 Given that the SRB annexed to the defence the Valuer’s declarations referred to in paragraphs 273 to 276 above, in which the Valuer describes the services it provided to Banco Popular and to Banco Santander, the measure of inquiry requested by the applicants is not necessary. 288 The first part of the present plea must therefore be rejected. (b) The second part, alleging that the Valuer was not independent within the meaning of Article 38 of Delegated Regulation 2016/1075 289 The applicants submit that, in the light of the factors set out in Article 41(4)(a) and (c) of Delegated Regulation 2016/1075, the Valuer did not fulfil the conditions for being considered to have no actual or potential material interest in common or in conflict with a relevant public authority or with the relevant entity for three reasons, relating to the relationship between the Valuer and Banco Popular, the services provided to Banco Santander and the fact that it had carried out Valuation 2. 290 In that regard, it should be noted that the rules on the independence of valuers are set out in Chapter IV of Delegated Regulation 2016/1075, Article 38 of which provides: ‘A legal or natural person may be appointed as a valuer. The valuer shall be deemed to be independent from any relevant public authority and the relevant entity where all the following conditions are met: (1) the valuer possesses the qualifications, experience, ability, knowledge and resources required and can carry out the valuation effectively without undue reliance on any relevant public authority or the relevant entity in accordance with Article 39; (2) the valuer is legally separated from the relevant public authorities and the relevant entity in accordance with Article 40; (3) the valuer has no material common or conflicting interest within the meaning of Article 41.’ 291 Article 41 of Delegated Regulation 2016/1075, relating to material common or conflicting interests, provides: ‘1. The independent valuer shall not have an actual or potential material interest in common or in conflict with any relevant public authority or the relevant entity. 2. For the purposes of paragraph 1 an actual or potential interest shall be deemed material whenever, in the assessment of the appointing authority or such other authority as may be empowered to perform this task in the Member State concerned, it could influence, or be reasonably perceived to influence, the independent valuer’s judgement in carrying out the valuation. 3. For the purposes of paragraph 1 interests in common or in conflict with at least the following parties shall be relevant: (a) the senior management and the members of the management body of the relevant entity; (b) the legal or natural persons who control or have a qualifying holding in the relevant entity; (c) the creditors identified by the appointing authority, or such other authority as may be empowered to perform this task in the Member State concerned, to be significant on the basis of the information available to the appointing authority or such other authority as may be empowered to perform this task in the Member State concerned; (d) each group entity. 4. For the purposes of paragraph 1 at least the following matters shall be relevant: (a) the provision by the independent valuer of services, including the past provision of services, to the relevant entity and the persons referred to in paragraph 3, and in particular the link between those services and the elements relevant for the valuation; (b) personal and financial relationships between the independent valuer and the relevant entity and the persons referred to in paragraph 3; (c) investments or other material financial interests of the independent valuer; (d) in relation to legal persons, any structural separation or other arrangements that shall be put in place to address any threats to independence such as self-review, self-interest, advocacy, familiarity, trust or intimidation, including arrangements to differentiate between those staff members who may be involved in the valuation and other staff members. …’ 292 As a preliminary point, it must be observed that the applicants do not dispute that the conditions laid down in points 1 and 2 of Article 38 of Delegated Regulation 2016/1075 were met by the Valuer, that is to say that it possessed the qualifications, experience, ability, knowledge and resources required to carry out Valuation 3 effectively and that it was legally separate from the relevant public authorities and from Banco Popular. 293 Nor do they claim that the Valuer had an actual or potential material interest in common or in conflict with the relevant public authority, namely the SRB. (1) The first complaint, relating to the links between the Valuer and Banco Popular 294 The applicants submit that the Valuer was not independent from Banco Popular, in that it appears to have provided Banco Popular with services between 2012 and 2016, including services relevant to Valuation 3. The SRB failed to take into account the existence of material conflicts of interest between the Valuer and Banco Popular, in breach of Article 41(4) of Delegated Regulation 2016/1075. 295 First, the applicants claim that the Valuer was Banco Popular’s auditor in 2012. 296 In that regard, it is sufficient to note that it is clear from the information on the website of the Comisión nacional del mercado de valores (CNMV) (National Securities Market Commission, Spain), referred to by the SRB, that the Valuer was not Banco Popular’s auditor between 1991 and 2017. 297 Moreover, the applicants’ argument is based on a misreading of the Bank of Spain’s document of 28 September 2012 entitled ‘Proceso de recapitalización y reestructuración bancaria’ (Bank recapitalisation and restructuring process), which they produce as an annex to the application. 298 The table taken from that document does not state that the Valuer was Banco Popular’s auditor in 2012, which the applicants acknowledged at the hearing. It is apparent from that document that the Bank of Spain entrusted the Valuer with work concerning the accounting review of the credit portfolio and the assets foreclosed or received in payment of debts of Banco Popular and three other banks, as part of the independent assessment of the Spanish banking sector carried out in 2012. 299 Furthermore, it should be noted that, in its declaration of absence of conflict of interest of 22 May 2017, referred to in paragraph 273 above, the Valuer specified that it was not Banco Popular’s auditor. 300 It follows that, contrary to what is claimed by the applicants, the Valuer did not provide auditing services to Banco Popular. 301 Second, the applicants submit that, in 2015, the Valuer advised Banco Popular on the sale of Popular Banca Privada, SA (‘Banca Privada’). They rely on an extract from Banco Popular’s registration document of 2015, according to which ‘in November 2015, [Banco] Popular commissioned [the Valuer] to sell 40% of its subsidiary Popular Banca Privada’ and according to which ‘as of the date of this document, no firm sale [had] taken place and the initial percentage established [could] be different’. 302 In that regard, it should be noted that, in its declaration of absence of conflict of interest referred to in paragraph 273 above, the Valuer stated that it had provided valuation and transaction support to Banco Popular, but that those services did not constitute a conflict of interest in so far as they concerned either assistance on sales of assets or businesses that were no longer part of the bank, or buy-and-sell side support to non-significant deals that were aborted or had no material value. 303 It is sufficient to note that it is apparent from Valuation 3 that, at the resolution date, Banca Privada was a subsidiary owned by Banco Popular and that the transaction referred to by the applicants had not taken place in 2015. 304 Third, the applicants state that, according to a press article, Banco Popular had hired the Valuer in 2016 to advise it on the implementation of new regulatory standards, namely Circular 4/2017 of the Bank of Spain and IFRS 9, the use of which they dispute in Valuation 3. According to the applicants, such services are provided for in recital 40 and Article 41(4) of Delegated Regulation 2016/1075. 305 The applicants rely on an article in El Mundo of 13 February 2018, entitled ‘[The Valuer] advised Angel Ron in 2016 on Banco Popular’s accounting policy’, from which it is apparent that the Valuer had been hired in 2016 by Banco Popular for technical advice on the consequences of the entry into force of IFRS 9 for the new regulatory provisions to be applied from 1 January 2018. 306 It is apparent from that article that the Valuer stated that at no time had it worked on any aspect of the provisions recorded by Banco Popular and that this was advice on how the bank should adapt to new rules that came into force on 1 January 2018. 307 The applicants have not adduced any evidence capable of calling into question those statements made by the Valuer regarding the nature of the services provided to Banco Popular in connection with the implementation of IFRS 9. 308 Accordingly, the applicants have not established that there was a link between the services provided by the Valuer to Banco Popular, in connection with both the proposed sale of Banca Privada and the implementation of IFRS 9, and the elements relevant for Valuation 3, within the meaning of Article 41(4)(a) of Delegated Regulation 2016/1075. The applicants have not explained to what extent those services provided by the Valuer to Banco Popular in the past could influence the valuer’s judgement in carrying out Valuation 3 and therefore establish that there was an actual or potential material interest in common or in conflict with Banco Popular, within the meaning of Article 41(2) of that delegated regulation. 309 The first complaint must therefore be rejected. (2) The second complaint, relating to the links between the Valuer and Banco Santander 310 The applicants claim that the Valuer had provided accounting services to Banco Santander from 2002 to 2016 and was the main auditor for the Santander Group in 2015. They submit that, contrary to what the SRB stated in the contested decision, the fact that the Valuer might have been independent on 23 May 2017, the date on which the SRB appointed it as a valuer, is not relevant for the purposes of Valuation 3. While the SRB could not have planned for Banco Santander’s involvement in the resolution procedure in May 2017, it should have taken that factor into account in June 2017 when it instructed the Valuer to carry out Valuation 3. The SRB should also have taken into account the services provided by the Valuer to Banco Santander following the resolution of Banco Popular when Banco Popular was integrated into the Santander Group. 311 The applicants maintain that the services provided by the Valuer to Banco Santander are relevant in the light of Article 41(4)(a) of Delegated Regulation 2016/1075, which concerns the provision of prior services to an entity that owns the entity in resolution. 312 In that regard, it should be noted that, during the right to be heard process, some of the affected shareholders and creditors submitted comments on the independence of the Valuer, which was, according to them, compromised by the fact that it had provided services to Banco Santander before and after the resolution of Banco Popular. 313 First, in the contested decision, in response to those comments, the SRB considered that in its assessment of independence conducted at the time of the engagement of the Valuer on 23 May 2017, it was not required to take into account the audit services provided to Banco Santander by the Valuer, since that assessment had been carried out in relation to Banco Popular. The SRB stated that, at that point in time, an assessment of the independence of the Valuer vis-à-vis the potential purchasers had not been performed since, on the one hand, it was not envisaged in the legal framework and, on the other, the valuation procedure was a separate process from the marketing procedure which determined the purchaser. In particular, the Valuer did not have access to any information on the names of the potential purchasers or the identity of the purchaser until the adoption of the resolution scheme. 314 The SRB considered that, in the light of the scope and the purpose of Valuation 3, the audit services provided in the past by the Valuer to Banco Santander did not interfere with the independence of the Valuer regarding the performance of Valuation 3 and did not give rise to an actual or potential material interest in common or in conflict, within the meaning of Article 41 of Delegated Regulation 2016/1075. In particular, it noted that Valuation 3 concerned only the assets and liabilities of Banco Popular prior to its sale to Banco Santander and not those of Banco Santander. 315 Second, the SRB considered that the services relating to the integration of Banco Popular provided by the Valuer to Banco Santander did not constitute a material conflict of interest or interest in common within the meaning of Article 41(2) and (4) of Delegated Regulation 2016/1075, with a relevant person within the meaning of Article 41(3) of that delegated regulation. 316 On the one hand, the SRB considered that, in the light of the scope and the purpose of Valuation 3, the services provided by the Valuer after the resolution date on a going concern basis could not affect Valuation 3 and the elements therein. Moreover, it noted that Valuation 3 could not adversely affect the position of Banco Popular or of Banco Santander, since it determined only whether compensation through the Single Resolution Fund (SRF) should be paid to the affected shareholders and creditors. 317 On the other hand, the SRB considered that, in any event, after the adoption of the resolution scheme, the Valuer had provided additional assurances to guarantee that the services rendered to Banco Santander could not give rise to an actual or potential material interest in common or in conflict. The SRB noted that, in its declaration of 18 December 2019, the Valuer had confirmed that no service provided to Banco Santander was related to the valuation or the financial reporting of the assets or liabilities that were the subject of Valuation 3. In addition, it stated that the Valuer had confirmed that there was no information flow between the valuation work performed and other projects, given the safeguards put in place and the Valuer’s confidentiality protocols. 318 In particular, as regards the services provided in relation to the integration of Banco Popular, the SRB stated that the Valuer had clarified to the satisfaction of the SRB that even though it had provided consulting services to Banco Santander, they were not related to the services provided to the SRB, did not relate to any matter in connection with the valuation services provided to the SRB and did not comprise valuation or legal services related to Banco Popular. 319 In that regard, it should be noted that, in its declaration of absence of conflict of interest of 18 December 2019, referred to in paragraph 276 above, the Valuer stated that there was no link between the services that it provided to Banco Santander and Valuation 3 or the Clarification Document. 320 Pursuant to Article 41(4)(a) of Delegated Regulation 2016/1075, for the purpose of establishing the existence of an actual or potential material interest in common or in conflict within the meaning of paragraph 1 of that article, the provision by the independent valuer of services, including the past provision of services, to the relevant entity and the persons referred to in paragraph 3, and in particular the link between those services and the elements relevant for the valuation, is relevant. 321 It must be stated that the applicants have not put forward any argument seeking to call into question the SRB’s assessments relating to the absence of a link between, on the one hand, the auditing services and the services relating to the integration of Banco Popular provided by the Valuer to Banco Santander and, on the other hand, the elements relevant to Valuation 3, which concerned only the valuation of Banco Popular and not that of Banco Santander. 322 The applicants do not explain how those services could have influenced or could have been reasonably perceived to influence the Valuer’s judgement in carrying out Valuation 3, within the meaning of Article 41(2) of Delegated Regulation 2016/1075. 323 Furthermore, the applicants submit that the Valuer had a material financial interest in keeping Banco Santander satisfied with a negative valuation of Banco Popular. They submit that the fact that the compensation is paid by the SRF rather than Banco Santander ignores the reality that, if the ongoing proceedings before the Court for annulment of the resolution scheme were successful, Banco Santander might be compelled to pay a higher price for Banco Popular. It is therefore in Banco Santander’s interest that Valuation 3 does not reveal a substantially higher value of Banco Popular’s recoveries in insolvency than that found in Valuation 2. 324 In the contested decision, the SRB noted that, considering the purpose of Valuation 3, which is to determine whether the affected shareholders and creditors would have received better treatment in hypothetical normal insolvency proceedings, Valuation 3 could not have an effect on the sale of Banco Popular and could not adversely affect the position of Banco Santander. The SRB found that the only effect of Valuation 3 was ultimately on the SRB, in so far as it would be required to pay compensation through the SRF in case of a difference in treatment. 325 It should be noted that the applicants do not claim that the outcome of Valuation 3 has an influence on the legality and legitimacy of the decision to place Banco Popular under resolution as well as the outcome of that resolution, namely the sale of Banco Popular to Banco Santander. 326 In addition, it should be recalled that Valuation 2 had a different purpose to that of Valuation 3, namely to estimate the total value of Banco Popular for a potential purchaser in connection with the application of the sale of business tool. Thus, the estimate of the value of Banco Popular’s assets in hypothetical normal insolvency proceedings carried out in Valuation 3 is not capable of calling into question the assessment carried out in Valuation 2. 327 Last, according to the last subparagraph of Article 85(4) of Directive 2014/59, where it is necessary to protect the interests of third parties acting in good faith who have acquired shares of an institution under resolution by virtue of the use of resolution tools, the annulment of a decision of a resolution authority is not to affect any subsequent administrative acts or transactions concluded by the resolution authority concerned which were based on the annulled decision. 328 Accordingly, contrary to what the applicants submit, the possible annulment of the resolution decision cannot lead to a change in the conditions of the sale of Banco Popular to Banco Santander. Therefore, in any event, the sale of Banco Popular to Banco Santander for the price of EUR 1 cannot be called into question and the outcome of Valuation 3 is immaterial in that regard. 329 Furthermore, at the hearing, the applicants referred to the impact that the annulment of the contested decision could have on criminal proceedings brought before the Spanish courts. 330 In that regard, it is sufficient to note that the Court of Justice has held that both an action for damages and an action for a declaration of nullity essentially require that the credit institution or investment firm under resolution, or the successor of those entities, compensate shareholders for the losses incurred as a consequence of the exercise by a resolution authority of the write-down and conversion powers in relation to liabilities of that institution or firm, or require that it reimburse in full the sums invested during the subscription of shares that have been written down as a result of that resolution procedure. Such actions would call into question the entire valuation upon which the resolution decision is based because the breakdown of the capital forms part of the objective data for that valuation. As noted by Advocate General Richard de la Tour in points 82 and 95 of his Opinion, the resolution procedure itself as well as the objectives pursued by Directive 2014/59 would thus be frustrated (judgment of 5 May 2022, Banco Santander (Resolution of Banco Popular), C‑410/20, EU:C:2022:351, paragraph 43). 331 Therefore, in so far as Valuation 3, whatever its outcome, could not affect Banco Santander’s situation, the applicants are incorrect in claiming that the Valuer had an interest in favouring Banco Santander. 332 It follows that the applicants have not established that the SRB made a manifest error in considering that the services provided by the Valuer to Banco Santander did not establish that there were actual or potential material interests that could influence or be reasonably perceived to influence its judgement, within the meaning of Article 41 of Delegated Regulation 2016/1075. 333 Accordingly, the second complaint must be rejected. (3) The third complaint, relating to the fact that the Valuer had carried out Valuation 2 334 The applicants claim that the previous involvement of the Valuer in the resolution process could have influenced its judgement. Valuation 3 appears to have been engineered to reach a conclusion consistent with the assessment of difference in treatment set out in Valuation 2. They maintain that the SRB had opportunities to appoint another valuer. 335 It must be observed that that complaint concerns the second part of Valuation 2, which contains a simulation of a liquidation scenario and is intended, in accordance with Article 20(9) of Regulation No 806/2014, to estimate the treatment that each class of shareholders and creditors would have been expected to receive if the entity covered by the resolution action were wound up under normal insolvency proceedings under Spanish law. 336 First of all, it should be noted that no provision of Regulation No 806/2014 or Delegated Regulation 2016/1075 expressly precludes Valuations 2 and 3 from being carried out by the same valuer. 337 Next, it follows from the contested decision that, during the right to be heard process, some of the affected shareholders and creditors submitted comments on the independence of the Valuer, which was, according to them, compromised by the fact that it had had carried out both Valuation 2 and Valuation 3. The SRB noted that some of them maintained that the Valuer sought to ratify the conclusions of the ‘no creditor worse off’ analysis that it had performed in Valuation 2. 338 The SRB stated that Valuations 2 and 3 were conducted for different purposes and therefore used different approaches. Valuation 2 aimed, pursuant to Article 20(5) of Regulation No 806/2014, to inform the resolution action by estimating the economic value of Banco Popular’s assets and liabilities at the resolution date, while Valuation 3 aimed to estimate the treatment of the affected shareholders and creditors in hypothetical insolvency proceedings, that is to say, on a gone concern basis, in accordance with Article 20(18)(a) of that regulation. 339 The SRB noted that the legal framework did not prevent it from appointing the same valuer to conduct different valuations for the same resolution case and that such appointment per se did not impair the independence of the valuer. 340 The SRB stated that, while the ex-ante estimate of the treatment of the affected shareholders and creditors in hypothetical insolvency proceedings included in Valuation 2 had been performed within a specific timeframe and on the basis of the information available to the Valuer before resolution, that is to say, mainly the information available on 31 March 2017, Valuation 3 was performed on the basis of more granular information as at 6 June 2017, on the date of close of business, when available. The SRB considered that, in the light of the different information used as a basis for those assessments, as well as the different purpose thereof, the Valuer could well have reached different conclusions. 341 In the contested decision, the SRB also stated that the applicable legal framework recognised that the provisional estimate of the treatment that the affected shareholders and creditors would have been expected to receive if the entity were wound up in the context of Valuation 2 could not be as precise as the Valuation 3 assessment for several reasons, namely, inter alia, the time constraints and the lack of data as close to the resolution date in the context of Valuation 2. Thus, in accordance with Article 20(9) of Regulation No 806/2014, Valuation 2 was to include an ‘estimate’ of that treatment, whereas, in accordance with Article 20(17) of that regulation, Valuation 3 was required to ‘determine’ it. The SRB stated that the mere fact that the provisional estimate contained in Valuation 2 and Valuation 3 were similar with respect to the outcome but were based on different assumptions could not be considered in itself sufficient evidence that Valuation 3 had not been performed in line with the legal requirements. 342 In addition, first, it should be noted that, in Valuation 2, the Valuer expressed several reservations as to the reliability of the liquidation scenario simulation set out therein. 343 In that regard, in Valuation 2, the Valuer stated that it did not have all the necessary information and data or sufficient time to make a more than merely illustrative estimate at that stage. It stated on several occasions that there were several uncertainties underlying the liquidation scenario simulation and that, when more precise information became available, it would be able to refine its assumptions and prepare a more ‘robust’ and reliable liquidation scenario. 344 The applicants cannot therefore maintain that the Valuer was not independent on the ground that it considered itself bound by the findings of Valuation 2. 345 Second, in Valuation 2, the liquidation scenario simulation in respect of Banco Popular was based on the data available on 31 March 2017 and provided for a three-year scenario. In Valuation 3, the Valuer relied on the unaudited financial information of 6 June 2017 or, if that information was unavailable, on the information of 31 May 2017, in order to establish three distinct liquidation time scenarios. 346 Thus, in Valuation 3, the Valuer did not merely confirm the outcome of the simulation set out in Valuation 2. 347 In that regard, for example, in Valuation 2, the total of the realisation of Banco Popular’s assets for creditors, in the case of a three-year liquidation scenario, was estimated at between EUR 120.9 billion in the best-case scenario and EUR 116.5 billion in the worst-case scenario. In Valuation 3, for the three-year liquidation scenario, the valuation of the assets led to a different outcome, namely EUR 101.546 billion in the best-case scenario and EUR 97.593 billion in the worst-case scenario. 348 The mere fact that the Valuer reached the same conclusion, namely that the affected shareholders and creditors would not obtain any recovery in the event of Banco Popular’s liquidation, is not sufficient to establish that it considered itself bound by its assessment made in Valuation 2 when it carried out Valuation 3. 349 It is clear that the applicants’ argument that the Valuer sought to confirm Valuation 2 in Valuation 3 is contradicted by the content of those valuations. 350 It follows that the applicants have not established that the SRB erred in considering that the fact that the Valuer had carried out Valuation 2 did not call into question its independence in carrying out Valuation 3 or its appointment as an independent valuer. In that regard, the argument that the SRB could have appointed another valuer is ineffective. 351 Accordingly, the third complaint must be rejected. 352 It is apparent from the analysis of the second part of the present plea that the applicants have not raised any arguments capable of calling into question the SRB’s conclusion that the Valuer was independent within the meaning of Articles 38 and 41 of Delegated Regulation 2016/1075. 353 It follows that the second part and, accordingly, the second plea in its entirety must be rejected. 4. The third plea, alleging that the SRB improperly delegated to the Valuer the decision-making powers conferred on it by Regulation No 806/2014 354 The applicants submit that the contested decision, which involves a wide discretion as to whether the shareholders and creditors affected by the resolution decision are to receive compensation, was adopted by the SRB on the basis of Valuation 3, which was carried out by a private entity. They maintain that, in the contested decision, the SRB merely summarised Valuation 3 and the Clarification Document, namely the essential aspects of the exercise of the discretion whether to compensate the applicants or not. The delegation to the Valuer of the assessment of all issues relating to the valuation without reviewing the underlying data or the comments of the affected shareholders and creditors, and without checking the manifestly inconsistent assumptions detailed in the first plea, is contrary to the principle laid down in the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7). 355 The applicants claim that the SRB did not offer any evidence that it had conducted anything more than a cursory review of Valuation 3 and that it examined only the Clarification Document drawn up by the Valuer and not the comments submitted by the affected shareholders and creditors in relation to Valuation 3. The SRB did not depart from Valuation 3, and the decision as to whether the affected shareholders and creditors were entitled to compensation was effectively taken by the Valuer, which exercised the SRB’s decision-making power. They submit that the principle laid down in the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7), applies where the SRB’s powers, even if they are clearly defined executive powers, are delegated to the Valuer without proper supervision by the SRB. 356 As a preliminary point, it should be noted that the Treaties do not contain any provision providing for the conferral of powers on an EU body, office or agency. Thus, no mention is made of agencies in either Article 290 TFEU, which provides for delegation of rule-making in legislative acts to the Commission, or Article 291 TFEU, which confers implementing powers on the Member States, the Commission, and in some limited circumstances the Council (Opinion of Advocate General Jääskinen in United Kingdom v Council and Parliament, C‑270/12, EU:C:2013:562, point 75). 357 It is therefore the case-law, and in particular the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7), which laid down the principles governing the delegation of powers, and then the judgment of 22 January 2014, United Kingdom v Parliament and Council (C‑270/12, EU:C:2014:18), which applied those principles to cases where powers have been conferred on an agency by the EU legislature. 358 In paragraph 41 of the judgment of 22 January 2014, United Kingdom v Parliament and Council (C‑270/12, EU:C:2014:18), the Court of Justice stated that, in the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7), it had emphasised, in essence, that the consequences resulting from a delegation of powers are very different depending on whether it involved clearly defined executive powers the exercise of which could, therefore, be subject to strict review in the light of objective criteria determined by the delegating authority, or whether it involved a ‘discretionary power implying a wide margin of discretion which [could], according to the use which [was] made of it, make possible the execution of actual economic policy’. 359 The Court of Justice added that it had also stated in the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7) that a delegation of the first kind could not appreciably alter the consequences involved in the exercise of the powers concerned, whereas a delegation of the second kind, since it replaced the choices of the delegator by the choices of the delegate, brought about an ‘actual transfer of responsibility’. As regards the case which gave rise to the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7), the Court of Justice held that the powers delegated by the High Authority to the bodies in question by Decision No 14-55 of 26 March 1955, establishing a financial arrangement for ensuring a regular supply of ferrous scrap for the common market (OJ 1955 8, p. 685), gave those bodies ‘a degree of latitude which implied a wide margin of discretion’, which could not be considered compatible with the ‘requirements of the Treaty’ (judgment of 22 January 2014, United Kingdom v Parliament and Council, C‑270/12, EU:C:2014:18, paragraph 42). 360 It follows from that case-law that Regulation No 806/2014 may confer on the SRB clearly defined executive powers the exercise of which may, therefore, be subject to strict review in the light of objective criteria, but that that regulation cannot confer powers on the SRB where it involves a discretionary power implying a wide margin of discretion. 361 It should be noted that, in the present case, the applicants do not raise a plea of illegality in respect of Regulation No 806/2014. They do not claim that the SRB, as an EU agency, exercised a discretionary power that should have been exercised by an EU institution. Nor do the applicants claim that the SRB’s executive powers are not clearly defined in Regulation No 806/2014 or that the SRB infringed Regulation No 806/2014 by exceeding the powers conferred on it by that regulation. 362 It follows that the applicants’ arguments criticising the SRB for conferring a decision-making power on the Valuer cannot establish an infringement of the principles relating to the delegation of powers laid down in the judgment of 13 June 1958, Meroni v High Authority (9/56, EU:C:1958:7). 363 Furthermore, as regards the applicants’ argument that the SRB delegated its decision-making power to the Valuer, it must be recalled, first of all, that the decision not to grant compensation to the affected shareholders and creditors was adopted by the SRB, not by the Valuer. 364 Next, Article 76(1)(e) of Regulation No 806/2014 expressly provides that the SRB’s decision as to whether the affected shareholders and creditors are eligible for compensation must be based on the results of an independent valuation provided for in Article 20(16) of that regulation. In addition, the content of that valuation is governed by Article 20(17) and (18) of Regulation No 806/2014 and the criteria relating to the methodologies for valuation of difference in treatment are laid down in Delegated Regulation 2018/344. 365 Thus, pursuant to Regulation No 806/2014, the economic and technical aspects of the valuation of the treatment which the affected shareholders and creditors would have received if Banco Popular had been subject to normal insolvency proceedings had to be assessed by an independent valuer and not by the SRB itself. Contrary to what the applicants claim, the fact that the SRB entrusted the Valuer with carrying out Valuation 3 cannot be construed as a delegation of its power to adopt the decision. 366 Last, before adopting a decision on possible compensation for the affected shareholders and creditors, the SRB must verify that the valuation carried out by the independent expert complies with the requirements of Regulation No 806/2014 and Delegated Regulation 2018/344 and, also, that that expert meets the independence requirements laid down in Delegated Regulation 2016/1075. 367 In that regard, first, the fact that the SRB approved the conclusions of Valuation 3 cannot be interpreted as a failure by the SRB to monitor compliance with the requirements with which the independent valuer must comply when carrying out the valuation. 368 Second, the applicants’ argument that the SRB merely summarised Valuation 3 and the Clarification Document and that it did not review the comments of the affected shareholders and creditors relating to Valuation 3 is contradicted by the content of the contested decision. 369 In Section 4 of the contested decision, the SRB assessed the independence of the Valuer in the light of the requirements of Article 20(1) of Regulation No 806/2014 and Chapter IV of Delegated Regulation 2016/1075 and, in Section 6.2.1 of the contested decision, it responded to the ‘comments related to the independence of the Valuer’. 370 In Section 5 of the contested decision, entitled ‘Valuation 3 Report’, the SRB, after summarising the content of Valuation 3, considered that Valuation 3 complied with the requirements of the applicable legal framework, in particular those laid down in Article 20(17) of Regulation No 806/2014 and Article 3, Article 4(1) to (5) and Article 6(a) and (b) of Delegated Regulation 2018/344, and that it was sufficiently reasoned and comprehensive to form the basis for a decision under Article 76(1)(e) of Regulation No 806/2014. 371 In Section 6.2.2 of the contested decision, the SRB responded to the ‘comments on the content of the Valuation 3 Report’ relating, inter alia, to the information and assumptions used in Valuation 3, to the liquidation scenario and to the methodology taken into account by the Valuer. As regards the assessment of the various asset classes carried out in Valuation 3, the SRB examined whether it remained valid in the light of the comments of the affected shareholders and creditors and the Clarification Document. 372 It results from the foregoing that the applicants are incorrect in claiming that the SRB improperly delegated to the Valuer the decision-making powers conferred on it by Regulation No 806/2014. 373 It follows that the third plea must be rejected and, accordingly, the action must be dismissed in its entirety. IV. Costs 374 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the SRB, in accordance with the form of order sought by the SRB. 375 Under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs. The Kingdom of Spain must therefore bear its own costs. On those grounds, THE GENERAL COURT (Third Chamber, Extended Composition) hereby: 1. Authorises Bybrook Capital Badminton Fund LP to substitute itself for Cairn Global Funds PLC and Cairn Special Opportunities Credit Master Fund Limited as applicant. 2. Authorises PIMCO Global Cross-asset Opportunities Master Fund LDC to substitute itself for PHFS Series SPC – PHSF VII SP as applicant. 3. Dismisses the action. 4. Orders ACMO Sàrl and the other applicants whose names appear in the annex to bear their own costs and to pay those incurred by the Single Resolution Board (SRB); 5. Orders the Kingdom of Spain to bear its own costs. Van der Woude De Baere Steinfatt Kecsmár Kingston Delivered in open court in Luxembourg on 22 November 2023. V. Di Bucci M. van der Woude Registrar President Table of contents I. Background to the dispute II. Forms of order sought III. Law A. Admissibility B. Substance 1. Preliminary observations (a) The scope of the review carried out by the Court (b) Admissibility of the evidence annexed to the reply 2. The first plea, alleging manifest errors of assessment concerning the assessment of the length of the insolvency period and Banco Popular’s performing loans, non-performing loans, real estate assets and legal contingencies (a) The first part, concerning the length of the liquidation scenario (1) The first complaint, alleging a misunderstanding of Law 22/2003 (2) The second complaint, alleging failure to take a longer liquidation period into account (b) The second part, concerning the valuation of the performing loans (1) The first complaint, relating to the reclassification of performing loans as non-performing loans (2) The second complaint, relating to the prepayment assumptions for performing loans (i) Performing corporate loans (ii) Performing mortgage loans (3) The third complaint, relating to the new delinquencies in respect of the remaining performing loans (4) The fourth complaint, relating to the discount rate on the sale of the remainder of the performing loans portfolio (c) The third part, concerning the valuation of the non-performing loans (d) The fourth part, concerning the valuation of the real estate assets (e) The fifth part, concerning the valuation of the legal contingencies 3. The second plea, alleging that the SRB made a manifest error of assessment in appointing the Valuer as an independent valuer (a) The first part, alleging that the SRB did not examine whether the Valuer was independent (b) The second part, alleging that the Valuer was not independent within the meaning of Article 38 of Delegated Regulation 2016/1075 (1) The first complaint, relating to the links between the Valuer and Banco Popular (2) The second complaint, relating to the links between the Valuer and Banco Santander (3) The third complaint, relating to the fact that the Valuer had carried out Valuation 2 4. The third plea, alleging that the SRB improperly delegated to the Valuer the decision-making powers conferred on it by Regulation No 806/2014 IV. Costs * Language of the case: English. 1 The list of the other applicants is annexed only to the version notified to the parties.