ORDER OF THE GENERAL COURT (Eighth Chamber)
10 October 2019
(*)
(Action for annulment — Economic and monetary policy — Single resolution mechanism for credit institutions and certain investment firms — Resolution scheme in respect of Banco Popular Español — No ex post definitive valuation of Banco Popular Español — Lack of direct concern — Inadmissibility)
In Case T‑2/19,
Algebris (UK) Ltd, established in London (United Kingdom),
Anchorage Capital Group LLC, established in New York, New York (United States),
represented by T. Soames, lawyer,
R. East, Solicitor, N. Chesaites and D. Mackersie, Barristers,
applicants,
v
Single Resolution Board (SRB), represented by A. Valavanidou, I. Georgiopoulos and E. Muratori, acting as Agents, and by H.-G. Kamann, F. Louis, V. Del Pozo Espinosa De Los Monteros, G. Barthet and C. Schwedler, lawyers,
defendant,
APPLICATION under Article 263 TFEU for the annulment of the
‘decision of the SRB, notified to the applicants on 18 December 2018, not to proceed with an ex post
definitive valuation of Banco Popular Español, SA’,
THE GENERAL COURT (Eighth Chamber),
composed, at the time of the deliberation, of A.M. Collins, President, M. Kancheva and G. De Baere (Rapporteur), Judges,
Registrar: E. Coulon,
makes the following
Order
Background to the dispute
1        The applicants, Algebris (UK) Ltd and Anchorage Capital Group LLC, are investment fund managers who held Additional Tier 1 and Tier 2 instruments of Banco Popular Español, SA (‘Banco Popular’) before the adoption of a resolution scheme in respect of Banco Popular on the basis of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1).
The resolution of Banco Popular
2        On 7 June 2017 the Single Resolution Board (‘the SRB’ or ‘the Board’) adopted decision SRB/EES/2017/08, concerning a resolution scheme in respect of Banco Popular (‘the resolution decision’).
3        Prior to the adoption of the resolution decision, Banco Popular was valued in accordance with Article 20 of Regulation No 806/2014. That valuation includes two reports which are annexed to the resolution decision. The first valuation report (‘Valuation 1’), dated 5 June 2017, was compiled by the SRB pursuant to Article 20(5)(a) of Regulation No 806/2014 and was intended to inform the determination of whether the conditions for resolution, as defined in Article 18(1) of Regulation No 806/2014, were met. The second valuation report (‘Valuation 2’), dated 6 June 2017, was compiled by an independent expert, Deloitte, pursuant to Article 20(10) of Regulation No 806/2014. The purpose of Valuation 2 was to estimate the value of Banco Popular’s assets and liabilities, to provide an evaluation of the treatment that shareholders and creditors would have received if Banco Popular had entered into normal insolvency proceedings, and to inform the decision to be taken on the shares and instruments of ownership to be transferred and the SRB’s understanding
of what constituted commercial terms for the purposes of the sale of business tool.
4        In Article 5(1) of the resolution decision, the SRB decided that:
‘The resolution tool to be applied to [Banco Popular] shall consist in the sale of business pursuant to Article 24 of [Regulation No 806/2014] for transferring shares to a purchaser. The write down and conversion of capital instruments will be exercised immediately before the application of the sale of business tool.’
5        Article 6 of the resolution decision concerns the write down of capital instruments and the sale of business tool. In Article 6(1) of that decision, the SRB indicated which measures it had decided upon
pursuant to its write down power provided for in Article 21 of Regulation No 806/2014.
6        Accordingly, in Article 6(1) of the resolution decision, the SRB decided:
(a)      first, to write down the nominal amount of Banco Popular’s share capital in an amount of EUR 2 098 429 046, resulting in the cancellation of 100% of Banco Popular’s share capital;
(b)      subsequently, to convert all the principal amount of the Additional Tier 1 instruments issued by Banco Popular and outstanding as at the date of the resolution decision into newly issued shares of Banco Popular (‘New Shares I’);
(c)      subsequently, to write down to zero the nominal amount
of the ‘New Shares I’, which would result in the cancellation of 100% of those ‘New Shares I’;
(d)      subsequently, to convert all
the principal amount of Tier 2 instruments issued by Banco Popular and outstanding as at the date of the resolution decision into newly issued shares of Banco Popular (‘New Shares II’).
7        Article 6(3) of the resolution decision provides that those write down and conversion measures are based on Valuation 2, as supplemented and corroborated by the results of an
open and transparent marketing process conducted by the Spanish resolution authority, the Fondo de Reestructuración Ordenada Bancaria (FROB, Fund for Orderly Bank Restructuring).
8        In Article 6(5) of the resolution decision, the SRB indicated that it was exercising the powers under
Article 24(1)(a) of Regulation No 806/2014 concerning the sale of business tool and ordered the ‘New Shares II’ to be transferred to Banco Santander, SA, free and clear of any right or liens of any third party, in consideration for the payment of a purchase price of one euro. It is specified that the purchaser has already consented to the transfer.
9        On 7 June 2017 the European Commission adopted Decision (EU) 2017/1246 endorsing the resolution scheme for Banco Popular (OJ 2017 L 178, p. 15).
10      On the same day, FROB adopted the necessary measures to implement the resolution decision, in accordance with Article 29 of Regulation No 806/2014. Within that context, FROB approved the transfer of Banco Popular’s new shares resulting from the conversion of the Tier 2 instruments to Banco Santander.
11      On 14 June 2018
the SRB received the final report from Deloitte on the valuation, provided for in Article 20(16) and (17) of Regulation No 806/2014, intended to determine whether the shareholders and creditors affected by Banco Popular’s resolution scheme would have received better treatment if the institution had entered into normal insolvency proceedings (‘Valuation 3’).
12      On 7 August 2018 the SRB published an
announcement concerning its ‘Notice … of 2 August 2018 regarding its preliminary decision on whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning Banco Popular …
have been effected and the launching of the right to be heard process (SRB/EES/2018/132)’ (OJ 2018 C 277 I, p. 1).
Valuation 3 was annexed to that notice.
13      In this announcement, the SRB stated that:
‘It follows from the Valuation 3 Report that there is no difference between the actual treatment of the Affected Shareholders and Creditors and the treatment they would have received had the Institution
been subject to normal insolvency proceedings at the date of resolution. In view of the above, the SRB, in the Notice, decides on a preliminary basis that it is not required to pay compensation to the Affected Shareholders and Creditors pursuant to Article 76(1)(e) of Regulation (EU) No 806/2014.
In order for the SRB to be able to take its final decision on whether compensation needs to be granted, the SRB invites by the Notice the Affected Shareholders and Creditors to express interest in exercising their right to be heard regarding the above preliminary decision of the SRB, by following the consultation procedure …’
14      On 28 September 2018, following a merger by acquisition, Banco Santander became the universal successor of Banco Popular.
The applicants’ claims
15      By letter of 3 October 2018 sent to the SRB, the applicants stated that Valuations 1 and 2 were provisional and that, according to Article 20(11) of Regulation No 806/2014, ‘an ex post definitive valuation shall be carried out as soon as practicable’. They noted that the SRB had not announced when the definitive versions of Valuations 1 and 2 would be available and that they had learned through the Spanish press of a letter that the SRB had sent to the General Court stating that there would be no
ex
post definitive valuation of Banco Popular. They asked the SRB, first, to confirm that information, secondly, to publish or send them a copy of that letter and, thirdly, to indicate the reasons for the decision not to proceed with an ex post definitive valuation.
16      On 16 October 2018, the SRB published
on its website the letter of
2 August 2018 that it had sent to Deloitte. In that letter, the SRB informed Deloitte:
‘After careful assessment of the legal framework, the SRB considers that, in the light of the circumstances of the resolution of Banco Popular,
it is not necessary for an ex post definitive Valuation 2 as referred to in Article 20(11) of Regulation No 806/2014 to be prepared, in particular, since carrying out such valuation could not have an impact on the concluded sale of Banco Popular to Banco Santander that determined the market price of Banco Popular as an entity in an open, fair and transparent process.’
17      By letter of 25 October 2018, the SRB replied to the applicant’s letter of 3 October 2018. First, it stated that, pursuant to Article 38(2) of the Rules of Procedure of the General Court, it was not in a position to comment on, publish or disclose information contained in a document that had been submitted to the General Court in the context of pending proceedings. In so far as the request for transmission of that document to the applicants was to be interpreted as a request for access to documents in the context of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43), the SRB stated that it would be dealt with separately. Secondly, with regard to the applicants’ request to be provided with the SRB’s reasons for deciding not to proceed with an
ex
post definitive
valuation, the SRB informed the applicants of the publication on its website of the letter of 2 August addressed to Deloitte. The SRB quoted the extract from that letter that is referred to in paragraph 16 above.
18      By letter of 16 November 2018 addressed to the SRB, the applicants drew attention to the content of their letter of 3 October 2018. They also challenged the content of the SRB’s reply of 25 October 2018, in particular the fact that the SRB relied on the existence of pending proceedings in order to refuse to disclose the letter sent to the General Court or its content, in breach of the obligation to state reasons, and the fact that the SRB referred to the content of the letter of 2 August 2018 addressed to Deloitte. The applicants stated that, although the SRB had refused to confirm or deny expressly whether it had decided not to prepare ex
post Valuations 1 and 2, they regarded the letter addressed to Deloitte as further confirmation of the fact that the SRB had decided not to do so. They added that, if that was indeed the case, it was a clear violation of Article 20(11) of Regulation No 806/2014. The applicants also added that the letter addressed to Deloitte was not ‘published’ on the SRB website, as it could only be found on that website by using the search term ‘Deloitte’. Last, they stated that the letter addressed to Deloitte did not satisfy the SRB’s obligation to state reasons. The applicants therefore requested the SRB to confirm
expressly whether it had adopted a decision not to prepare ex post definitive Valuations 1 and 2 and, if that were the case, to disclose a copy of that decision to them.
19      By a first letter dated 18 December 2018, the SRB replied to the applicants’ letter of 16 November 2018. The SRB referred to the applicants’ requests in their letter of 3 October 2018 and the reply contained in its letter of 25 October 2018. It noted that, in their letter of 16 November 2018, the applicants repeated their request to the SRB to confirm whether it had adopted a decision not to prepare ex post definitive Valuations 1 and 2. The SRB pointed out that its letter of 25 October 2018 clearly set out its position in that respect and referred to the letter addressed to Deloitte in which the reasons for its decision not to proceed with an ex post definitive valuation were explained. The SRB stated that, by its letter of 25 October 2018, it had complied with its obligation to state reasons under Article 296 TFEU, in so far as it referred to the letter addressed to Deloitte, which explained the reasons for its decision not to proceed with an ex
post definitive valuation. The SRB noted that the applicants might disagree with those reasons, but that did not mean that the letter failed to state such reasons. Finally, the SRB disputed the applicants’ allegations that the letter addressed to Deloitte was not published on its website.
20      In addition, on the same day, the SRB sent a second letter to the applicants, in response to their request on the basis of Regulation No 1049/2001, set out in their letter of 16 November 2018, for access to the decision not to prepare
ex post definitive Valuations 1 and 2 and the reasons for that decision. In that letter, the SRB noted the content of the applicants’ letter of 3 October 2018 and its reply of 25 October 2018. The SRB also referred to another letter, sent to the applicants on 25 October 2018, informing them that access to the letter sent to the General Court could not be granted on the basis of the exception provided for in Article 4(2), second indent, of Regulation No 1049/2001 concerning exceptions relating to the protection of court proceedings and legal advice. The SRB noted that the applicants had not submitted a confirmatory application asking the SRB to reconsider its position, pursuant to
Article 7(2) of Regulation No 1049/2001, and that, by letter of 16 November 2018, the applicants had requested access to the decision not to prepare ex post definitive Valuations 1 and 2. The SRB refused access to the requested document on the basis of the exception provided for in Article 4(3) of Regulation No 1049/2001 concerning the protection of the SRB’s decision-making process and the exception provided for in Article 4(2), second indent, of Regulation No 1049/2001.
Procedure and forms of order sought
21      By application lodged at the General Court Registry on 4 January 2019, the applicants brought the present action.
22      The applicants claim that the Court should:
–        annul the ‘decision of the SRB, notified by the first letter of 18 December 2018, not to proceed with an ex post definitive valuation of Banco Popular’;
–        order the SRB to pay the costs.
23      The SRB contends that the Court should:
–        dismiss the action as being inadmissible;
–        in the alternative, reject the pleas in law as being ineffective or unfounded;
–        order the applicants to pay the costs.
Law
24      Under Article 129 of the Rules of Procedure, on a proposal from the Judge-Rapporteur, the Court may at any time of its own motion, after hearing the main parties, decide to rule by reasoned order on whether there exists any absolute bar to proceeding with a case.
25      In the present case, the Court considers that it has sufficient information from the material in the file and has decided to give a decision without taking further steps in the proceedings.
26      As regards the subject matter of the action, the applicants state in paragraph 1 of the application that they seek the annulment of the SRB’s decision not to carry out an ex post definitive valuation of Banco Popular. In paragraph 5 of the application, the applicants submit that, in the first letter of 18 December 2018, the SRB referred to the letter it had sent to Deloitte, stating that that letter explained the reasons for its ‘decision’ not to proceed with an ex post
definitive valuation. They therefore maintain that that decision was ‘notified’ to them for the first time in that letter of 18 December 2018. The applicants add that that decision has not been formally published or notified in the Official Journal. In addition, the applicants dispute
the fact that the letter sent to Deloitte may constitute such a decision.
27      Accordingly, the applicants do not claim that the letter of 18 December 2018 constitutes the SRB’s decision not to proceed with an ex
post definitive valuation, but that they were informed of that decision for the first time in that letter.
28      The SRB submits, as its principal argument, that the action is inadmissible. The SRB considers, first, that the letter of 18 December 2018 is not a decision likely to produce legal effects, secondly, that no ‘decision’ directly and individually concerns the applicants and, thirdly, that the applicants have not shown that they have an interest in bringing proceedings.
29      In particular, the SRB maintains that the letter of 18 December 2018, even if it produces legal effects, would not be of direct and individual concern to the applicants.
30      With respect to the applicants’ direct concern, the SRB submits, first, that an ex post definitive valuation is not necessary in circumstances such as those in the present case. Such a valuation would have no added value,
since the sale of Banco Popular was carried out as part of a lawful competitive marketing process, which provided an actual indication of Banco Popular’s market value at the time of the adoption of the resolution decision.
31      Secondly, Article 20(12) of Regulation No 806/2014 does not allow the adoption of a compensatory decision in the circumstances of the present case. In that regard, Article 20(12)(b) of Regulation No 806/2014 refers to potential compensatory decisions following a resolution by means of the bridge institution tool and the asset separation tool. That provision does not refer to the
sale of business tool used for the resolution of Banco Popular and is therefore not applicable in the present circumstances. Article 20(12)(a) of Regulation No 806/2014 refers to potential compensatory decisions following a resolution by means of the bail-in tool and not to the exercise of a power to write down and convert capital instruments applied in the circumstances of the present case. That provision would in any event not be applicable in circumstances such as those in the present case, where the exercise of the power to write down and convert capital instruments was followed by a transfer of the shares of the resolved entity to a third party under the sale of business tool.
32      The SRB was not in a position to request FROB to instruct Banco Santander to make a further payment to former Banco Popular shareholders, given the terms of the transfer of Banco Popular to Banco Santander as reflected in the sale and purchase agreement between FROB and Banco Santander. In accordance with the objectives of the resolution and the provisions of Article 85(4) of Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ 2014 L 173, p. 190), the interests of third parties must be protected when they have acquired, in good faith, the shares of an entity under resolution as part of the resolution scheme.
33      Thirdly, the SRB maintains that it cannot adopt a decision to compensate former shareholders and creditors of a resolved entity whose instruments were lawfully written down in the context of a resolution action, based on the hypothetical difference between Valuation 2 and the ex post definitive valuation. Contrary to what is provided for in respect of Valuation 3, Regulation No 806/2014 does not provide any legal basis for such a possibility.
34      The applicants submit that the decision not to proceed with an ex post definitive valuation is of direct concern to the entities they manage and represent, which held Additional Tier 1 and Tier 2 instruments in Banco Popular.
35      That decision is capable of affecting the situation of the funds represented by the applicants, since it
will result in there being no consideration of the write back of the value of their Additional Tier 1 and Tier 2 instruments or of an increase in the consideration paid by Banco Santander. The preparation of an ex
post definitive valuation provides protection for holders of capital instruments, such as the applicants, where valuations were carried out on a provisional basis, in circumstances of urgency, which could undermine their accuracy. It is likely that an ex
post definitive Valuation 2 would result in a higher estimate of Banco Popular’s net asset value.
36      According to the applicants, the annulment of the decision not to proceed with an ex
post definitive valuation of Banco Popular will necessarily entail the preparation of such a valuation, as the SRB has no discretion under Article 20(11) of Regulation No 806/2014. The preparation of an ex post definitive valuation
will directly affect the legal situation of the funds represented by the applicants, as it requires the SRB to consider the write back of Additional Tier 1 and Tier 2 instruments that were expropriated from the funds as a result of the resolution decision or to increase the consideration paid by Banco Santander.
37      It must be recalled that the admissibility of an action brought by natural or legal persons against an act which is not addressed to them, in accordance with the fourth paragraph of Article 263 TFEU, is subject to the condition that they are recognised as having standing to bring proceedings, which arises in two situations. First, such proceedings may be instituted if the act is of direct and individual concern to those persons. Second, such persons may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them (see judgment of 13 March 2018, European Union Copper Task Force v Commission, C‑384/16 P, EU:C:2018:176, paragraph 32 and the case-law cited).
38      Since both situations presuppose that the contested act
is of direct concern to the applicant, that condition must be examined first.
39      According to settled case-law of the Court of Justice, the condition that a natural or legal person must be directly concerned by the decision against which the action is brought, laid down in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met, namely, first, the contested measure must directly affect the legal situation of the individual and, second, it must leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules (see judgment of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori
and
Commission v Ferracci, C‑622/16 P to C‑624/16 P, EU:C:2018:873, paragraph 42 and the case‑law cited).
40      It is therefore necessary to examine whether the applicants’ legal situation is affected by the decision not to proceed with an ex post definitive valuation of Banco Popular and by the possibility of compensation resulting from that decision.
41      Article 20(11) of Regulation No 806/2014 states:
‘A valuation that does not comply with all of the requirements laid down in paragraphs 1 and 4 to 9 shall be considered to be provisional until an independent person as referred to in paragraph 1 has carried out a valuation that is fully compliant with all of the requirements laid down in those paragraphs. That ex
post definitive valuation shall be carried out as soon as practicable. It may be carried out either separately from the valuation referred to in paragraphs 16, 17 and 18, or simultaneously with and by the same independent person as that valuation, but shall be distinct from it.
The purposes of the ex
post definitive valuation shall be:
(a)      to ensure that any losses on the assets of an entity referred to in Article 2 are fully recognised in the books of accounts of that entity;
(b)      to inform the decision to write back creditors’ claims or to increase the value of the consideration paid, in accordance with paragraph 12 of this article.’
42      Article 20(12) of Regulation No 806/2014 provides:
‘In the event that the ex post definitive valuation’s estimate of the net asset value of an entity referred to in Article 2 is higher than the provisional valuation’s estimate of the net asset value of that entity, the Board may request the national resolution authority to:
(a)      exercise its power to increase the value of the claims of creditors or owners of relevant capital instruments which have been written down under the bail-in tool;
(b)      instruct a bridge institution or asset management vehicle to make a further payment of consideration in respect of the assets, rights or liabilities to an institution under resolution, or as the case may be, in respect of the instruments of ownership to the owners of those instruments of ownership.’
43      First, concerning the objective referred to in Article 20(11)(a) of Regulation No 806/2014, it should be noted that the applicants do not submit that that provision applies in the circumstances of the present case.
44      In that regard, it is sufficient to note that, in accordance with the resolution decision, following the exercise of the power to write down and convert Banco Popular’s capital instruments, all Banco Popular’s shares were transferred to Banco Santander pursuant to the sale of business tool. It was therefore for Banco Santander to ensure that any losses incurred were reflected in the accounts when consolidating Banco Popular’s assets and liabilities.
45      Secondly, with regard to the objective referred to in Article 20(11)(b) of Regulation No 806/2014, it is apparent from that provision that it must be read in the light of Article 20(12) of Regulation No 806/2014.
46      Article 20(12) of Regulation No 806/2014 provides that if, following an ex
post definitive valuation, the estimate resulting from that valuation is higher than that resulting from the provisional valuation, the Board may request the national resolution authority either to increase the value of claims of creditors or owners of relevant capital instruments that have been written down under the bail-in tool or to instruct a bridge institution or asset management vehicle to make a further payment of consideration to an institution under resolution.
47      That provision expressly refers to situations in which compensation (by an increase in the value of the claims or the payment of additional consideration) may be granted following an ex
post definitive valuation.
Such compensation applies only where the resolution scheme applied to the entity is either the bail-in tool under
Article 27 of Regulation No 806/2014, the bridge institution tool under
Article 25 of Regulation No 806/2014 or the asset separation tool under
Article 26 of Regulation No 806/2014.
48      However, those resolution tools were not applied in the circumstances of the present case. It should be noted that the resolution tool adopted in respect of Banco Popular is the sale of business tool, under
Article 24 of Regulation No 806/2014, and that the application of that tool led to the sale of the entirety of Banco Popular to Banco Santander.
49      The
sale of business tool applied to Banco Popular is not one of the situations referred to in Article 20(12) of Regulation No 806/2014 in which compensation may be paid following an ex
post definitive valuation.
50      In addition, it is clear that Article 20(12) of Regulation No 806/2014 does not allow compensation for former shareholders and creditors of an entity whose capital instruments have been fully converted, written down and transferred to a third party.
51      In that regard, the applicants err in submitting that the decision not to proceed with an ex post definitive valuation of Banco Popular was capable of affecting the situation of the funds they represent because the consequence of that decision was that there was no
consideration of the write back of the value of their Additional Tier 1 and Tier 2 instruments and/or an increase in the consideration paid by Banco Santander.
52      By that argument, the applicants submit in essence that, if an ex post definitive valuation of Banco Popular were carried out, they could claim a write back of their claims or an increase in the value of the consideration paid by Banco Santander.
53      However, it should be recalled that, in the resolution of Banco Popular, the Additional Tier 1 instruments were converted into shares, fully written down and cancelled and the Tier 2 instruments were converted, written down and fully transferred to Banco Santander. As a result, Banco Popular’s previous shareholders are no longer shareholders in that entity following the adoption of the resolution decision.
54      As a result, following the exercise of the power to write down and convert Banco Popular’s capital instruments and the subsequent transfer of all the shares resulting from that exercise to Banco Santander, the applicants no longer hold capital instruments of Banco Popular
that can be the subject of compensation on the basis of
Article 20(12) of Regulation No 806/2014.
55      The applicants therefore cannot claim that the SRB’s decision not to proceed with an ex post definitive valuation of Banco Popular was of direct concern to them, since they cannot obtain any compensation on the basis of Article 20(12) of Regulation No 806/2014.
56      It follows that the SRB’s decision not to proceed with an ex post definitive valuation of Banco Popular does not produce any binding legal effects capable of affecting the applicants’ legal situation.
57      In that regard, a distinction must be made between Valuation 3, provided for in Article 20(16) of Regulation No 806/2014, and the ex post definitive valuation.
58      Article 20(16) of Regulation No 806/2014 provides:
‘For the purposes of assessing whether shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings, the Board shall ensure that a valuation is carried out by an independent person as referred to in paragraph 1 as soon as possible after the resolution action or actions have been effected. That valuation shall be distinct from the valuation carried out under paragraphs 1 to 15.’
59      Article 20(17) and (18) of Regulation No 806/2014 states:
‘17.      The valuation referred to in paragraph 16 shall determine:
(a)      the treatment that shareholders and creditors, or the relevant deposit guarantee schemes, would have received if an institution under resolution with respect to which the resolution action or actions have been effected, had entered normal insolvency proceedings at the time when the decision on the resolution action was taken;
(b)      the actual treatment that shareholders and creditors have received in the resolution of an institution under resolution; and
(c)      whether there is any difference between the treatment referred to in point (a) of this paragraph and the treatment referred to in point (b) of this paragraph.
18.      The valuation referred to in paragraph 16 shall:
(a)      assume that an institution under resolution with respect to which the resolution action or actions have been effected, would have entered normal insolvency proceedings at the time when the decision on the resolution action was taken;
(b)      assume that the resolution action or actions had not been effected;
(c)      disregard any provision of extraordinary public financial support to an institution under resolution.’
60      Thus, Regulation No 806/2014 clearly distinguishes between the two valuations carried out after the resolution, namely, on the one hand, the ex post definitive valuation provided for in Article 20(11) of Regulation No 806/2014 and, on the other hand, Valuation 3 referred to in Article 20(16) of that regulation.
61      The objective of Valuation 3 is to determine whether shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings and possibly to grant
them compensation.
62      In that regard, Article 76(1)(e) of Regulation No 806/2014 provides:
‘Within the resolution scheme, when applying the resolution tools to entities referred to in Article 2, the Board may use the Fund only to the extent necessary to ensure the effective application of the resolution tools for the following purposes:
…
(e)      to pay compensation to shareholders or creditors if, following an evaluation pursuant to Article 20(5) they have incurred greater losses tha[n] they would have incurred, following a valuation pursuant to Article 20(16), in a winding up under normal insolvency proceedings …’
63      In the circumstances of the present case, the applicants would potentially be entitled to compensation as a result of Valuation 3 and not
the ex
post definitive valuation.
64      It follows from all the foregoing that the SRB’s decision not to proceed with an ex post definitive valuation of Banco Popular is not of direct concern to the applicants, since that decision does not produce legal effects capable of affecting their legal situation.
65      Therefore, the present action must be dismissed as being inadmissible.
Costs
66      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 pay the costs, in accordance with the form of order sought by the SRB.
On those grounds,
THE GENERAL COURT (Eighth Chamber)
hereby orders:
1.      The action is dismissed as being inadmissible.
2.      Algebris (UK) Ltd and Anchorage Capital Group LLC shall pay the costs.
Luxembourg,
10 October 2019.
E. Coulon
A.M. Collins
Registrar
President
*      Language of the case: English.