The High Court in London awarded a $96.3m judgment sought by Greece’s Piraeus Bank against former Greek shipowner Michael Zolotas and two entities he controlled.
A decision against Zolotas comes as no surprise, as he said financial reasons barred him from representing himself at the court hearing on 16 February.
According to the ruling filed by justice Neil Calver, Zolotas also filed no specific defence, except sending the court an email in which he made "various criticisms of the bank”.
Piraeus Bank filed the claim in February 2020 against Zolotas, his company Grand Union and its vessel-owning subsidiary, Grand Anemi.
The claim, which amounted to $85.6m at the time the case was filed, resulted from a breach of a $112m loan agreed in 2009 between Grand Anemi and lender Marfin Egnatia Bank. The bank was later wound up and absorbed by Piraeus Bank during the financial crisis in Greece and Cyprus.
Despite the victory, it is highly uncertain if Piraeus Bank will be able to execute the claim against any remaining Zolotas assets in Greece. Legal proceedings in the country can go on for years. The bank has not bothered announcing the London ruling to its shareholders via the Athens bourse, where it is listed.
Bad-loan packages
Piraeus Bank already foreclosed on a Zolotas-owned property three years ago, worth €420,000 ($506,000). Instead of pursuing any time-consuming legal proceedings in Greece, it might dump the claim into any one of the billions of dollars-worth of bad-loan packages it is currently selling to third parties at deep discounts.
All major Greek banks currently dispose of such toxic debt to clean up their balance sheets, as part of the country's European Union-financed bailout. Last month, Piraeus Bank applied to benefit from a state-guarantee scheme that would facilitate the sale of such a loan package.
Greek media this week erroneously linked Piraeus Bank's case to a separate brush with the law that Zolotas is understood to have had on 1 March, when he is said to have been briefly detained by Athens police over unpaid social security contributions on behalf of former employees.
In an email to TradeWinds, Zolotas said that this issue had been "settled in accordance with the law".
Greek media also mistakenly linked the episode with a high-profile case in Cyprus, where Zolotas was accused of playing a role in the alleged bribery of a former central banker. However, he was acquitted in that case, as TradeWinds reported last year.
Zolotas has attributed all the disruption he is facing in his professional life to the Cyprus case, which dogged him for years.
His problems, however, go beyond that. The former head of NewLead Holdings has been facing an asset freeze in Greece for up to a value of about $22m since 2018.
This came in execution of a New York ruling from 2017, which found him guilty of agreement violation, fraud and conspiracy over a coal-supply deal with UK-based trading company TransAsia Commodities Investment.
TransAsia Commodities is understood to be on a global hunt for Zolotas assets to enforce the claim.
All cases against Zolotas are known to be within the domain of civil law and therefore carry no criminal penalties.
