Tartu savings and loan co-operative bankruptcy trustee: depositors to recover only one-third of funds

Tarmo Peterson, bankruptcy trustee for Tartu savings and loan co-operative (THLÜ), says that in the best-case scenario for depositors, they can expect to recover only about one-third of their deposited amounts. The bankruptcy did not result from a single decision, but rather from problems accumulated over years.

Tartu savings and loan co-operative (THLÜ) bankruptcy trustee Tarmo Peterson has completed a two-and-a-half-month investigation and concluded that the co-operative's financial problems do not stem from a single bad loan or wrong decision, but rather from prolonged and deepening accumulation of problems.

One-third is the best scenario

According to Peterson's assessment, each depositor can recover approximately one-third of their deposited amount in the best case. This means that co-operative members must accept that the majority of their savings have been lost.

The court declared THLÜ bankrupt after the interim bankruptcy trustee had conducted a thorough analysis of the co-operative's financial situation. Peterson, who initially served as interim bankruptcy trustee, has now been appointed as permanent bankruptcy trustee and continues with the realisation of the co-operative's assets and processing of creditor claims.

Years-long problems

Peterson stressed that THLÜ's difficulties accumulated over the years. No single loan or management decision is solely responsible for the problems; rather, this is a case of structural and long-term decline that eventually grew so large that the co-operative could no longer meet its obligations.

Tartu savings and loan co-operative was one of Estonia's well-known savings and loan co-operatives, with a large number of members and depositors. Savings and loan co-operatives are not regulated by Estonia's deposit guarantee scheme in the same way as banks, which means that depositor protection in case of bankruptcy is significantly weaker.