August 12, 2020
Statement of North Channel Bank on the indictment proceedings against the previous management by the prosecutor’s office Koblenz
Generally, we do not comment on ongoing investigations or proceedings. Over the past three years, under the current management, the bank has cooperated with the investigating authorities in a very transparent manner and supported the investigations.
The part of the business model that enabled the illegal cum-ex business at the expense of Denmark and Belgium was already ceased by the current management in early 2017. We have consistently terminated employment contracts with employees who had a proven active role in building and running the cum-ex business. Existing employees to whom similar behavior can be proven must also expect consequences under employment law.
Since early 2017, the bank has been completely restructured and provided with a new business model based on sustainability and trusting cooperation with our customers, a model which has received a highly positive response.
There is an agreement with Denmark and Belgium which enables the bank to exclude liability risks from cum-ex transactions by making an active contribution to loss limitation in the respective affected countries through the sale. As soon as the bank has been sold and the proceeds from the sale have been transferred to the two countries, all proceedings in both countries and the UK will be concluded. This sales process is underway.
The new management views this development as the best way for the bank to establish itself as a bank for entrepreneurs, especially for German mid-sized companies, which might be of considerable importance in these days.
North Channel Bank GmbH & Co. KG was founded in 1924 as the privately owned bank Bankhaus Oswald Kruber located in Berlin. In 2009, a North American group of investors with expertise in the US Life Settlements sector acquired the bank and renamed it North Channel Bank. In the following years, the bank developed into one of the leading institutions in US Life Settlement financing. For many years, the bank has been working with the experienced and renowned US servicer NorthStar Life Services, LLC, a former affiliate, and offers not only financing but also investments in US Life Settlements. The affiliate NorthStar Life Settlements Trading, LLC, Irvine, California, renamed in 2020, handles the trading of policies in this business segment. In the Structured Finance division, the bank focuses in particular on financing in the renewable energy sector (focus: equity interim financing), capital goods, and growth financing.