Berardo Foundation comes to an end and 980 million can be recovered

The Supreme Administrative Court decided, last week, to confirm the extinction of the Berardo Foundation, considering that it no longer served the social interest purposes for which it was created.

After the Central Administrative Court South (TCAS), now it was the turn of the Supreme Administrative Court to confirm the extinction of Fundação Berardo.

This decision paves the way for banks to execute the guarantees they have, which were used to finance credits exceeding 980 million euros.

The main creditor is Millenium bcpwith approximately 360 millionfollowed by Caixa Geral de Depósitoscom 280 millionand the New Bankwith more than 200 millionnot counting the accumulated late payment interest.

According to the newspaper, the STA’s decision follows the position defended by the Presidency of the Council of Ministers in the decision to terminate, taken on July 11, 2022, by order of the Secretary of State for the Presidency of the Council of Ministers, André Moz Caldas.

One of the aspects most criticized by the court was the reduced allocation of resources for the Foundation’s statutory purposes. The judges state that “the amounts allocated to the purposes for which the Foundation was created correspond to only approximately 0.1% of assets ”, conclusion taken from the report prepared by the General Inspectorate of Finance.

The financial situation progressively worsened. The debt ratio increased from 84% in 2011 to 207% in 2017. At the same time, equity funds registered a sharp deterioration, reaching a negative value greater than 517 million euros.

Another aspect highlighted by the court has to do with the use of foundational assets as collateral for bank loans. According to the judges, the Foundation voluntarily constituted a pledge on its participation titles in the Berardo Collection Associationan entity that held the artistic collection associated with the Berardo universe.

The STA also considers it demonstrated that the institution “encumbered foundational assets to secure emerging financing debts concluded with a view to acquiring shares representing interests in entities in the banking and financial sector”.

“It has been demonstrated that the real purpose does not coincide with the purpose foreseen in the act of institution, verifying the legal basis that justifies the extinction of Fundação Berardo”, concludes the STF.