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The Provincial Court of Córdoba dismisses the appeal of a financial entity and confirms the Judgment of the Court of First Instance number 7, which declares the nullity of a loan contract of 3,000,000 million euros by which the Córdoba City Council continued paying exorbitant fees accumulating around 10,000,000 euros paid. The City Council has been defended on this occasion by the Cordovan lawyer Rafael López Montes, member of Red Abafi Abogados y Economistas
Córdoba, 11/29/2022.- In a Judgment dated November 23, 2022, the Provincial Court of Córdoba ratifies that the City Council will recover absolutely disproportionate interests that did not stop growing scandalously. The origin of the conflict dates back to 2007, the date on which the Cordoba City Council made a loan with the entity Caja de Ahorros Castilla la Mancha for an amount of 3,000,000 euros. A very normal amount taking into account the volume of activity of the City Council. However, since 2010 the installments had skyrocketed, making the loan disproportionately more expensive, as if it were a snowball, with increasingly higher and higher installments to an absolutely unsustainable point in such a way that more than three times the initial capital.
The Cordovan lawyer Rafael López, despite examining all the available documentation (the entity did not provide all of it) did not find what he expected, either a floor clause or some financial derivative that had been arranged parallel to or linked to said financing, if Although the interest calculation formula caused him surprise, which made him suspect that perhaps the complicated financial product was implicit in the loan itself, for which reason he risked said hypothesis in the lawsuit, a hypothesis that was confirmed when the financial institution's response to the lawsuit arrived. Court (at that time Liberbank) and after almost two years of litigation, a sentence was obtained by the Court of First Instance No. 7 of Córdoba on November 18, 2021, which declared the nullity (due to lack of consent) of the contract of loan entered into on April 12, 2007 between the Córdoba City Council and the entity Caja de Ahorros de Castilla-La Mancha, ordering the refund of benefits (the City Council had close to 10,000,000 paid) with a sentence on the costs of the entity (the lawsuit was quantified by an indeterminate amount) and return of legal interest.
However, due to the enormous amount of the procedure, it was to be expected that the financial entity (currently Unicaja, which inherited the procedure from Liberbank) would present an Appeal, as it finally happened, and, after the opposition to it presented by the aforementioned lawyer, The Provincial Court of Córdoba dismisses the appeal and confirms the resolution of the Judgment with a new Judgment that, according to the lawyer who has led the procedure, is very well founded, confirming the analysis of the extremely high-risk and very complicated financial derivative that was located in the interest calculation formula for the 3,000,000 euro loan signed between the City Council and Caja de Ahorros Castilla-La Mancha, and concluding that, as proposed and with the information provided, it is not possible for the municipal team that managed the signing of the loan could be aware of the true risk of damage that was being assumed.
The Judgment of the Provincial Court also determines that even if the borrower were a City Council, it cannot be considered that its technicians (it mentions the Treasurer and the Comptroller) given the complexity of the product in question, could have the necessary qualification to understand the nature and risks of the contracted product, and mentions two Supreme Court Rulings referring to financial swaps (another type of derivatives of a similar cut) contracted by other Town Halls.
In summary, the lawyer concludes, once again the best possible result has been produced for the City Council before the appeal filed by the entity, which is completely dismissed, and although it knows that, surely due to the high amount of the matter, the condemned entity He will appeal again to the Supreme Court, he trusts that both sentences, of Instance and of Appeal, are very well founded and that the entity will think twice.
It so happens that this lawyer already obtained a very favorable resolution for the citizens of Córdoba in general, since he was responsible for the Supreme Court Judgment dated March 24, 2015, which led to the elimination, collectively, of the floor clause of another financial entity simultaneously for more than 40,000 families, the majority of this city, with an economic impact quantified by the defendant entity in more than three million euros per month since then.
However, despite these figures and economic impact for the city of Córdoba, neither of the two lawsuits, according to López Montes, due to different circumstances, have involved more than "symbolic" remuneration, which, he states, does not detract from the evident personal and professional satisfaction that these fruits of his study and work have brought him.
The lawyer concludes that the economic impact of the Judgment will be very important since to the retrocession of the benefits must be added the legal interests of each position, so that the amount that the city recovers can exceed ten million euros.
Contact name: Abafi Córdoba Network RAFAEL LOPEZ MONTES
Contact phone: 957612062