(Bloomberg) – Centerbridge Partners LP is seeking to terminate a deal to buy an Italian lender from Oaktree Capital Management LP, signed shortly before the bank’s allegations against companies related to Mafia were in crisis.
The entity affiliated with the Centre Bridge, Red UK Holdco Ltd., asked a London judge to announce his right to terminate the agreement to purchase Oaktree’s Banca Progetto Spa “effective immediately”, according to a March 5 court paper, in a March 5 court paper.
More than a month after the deal was concluded, the Milan court placed Banca Progetto under judicial administration at the request of Italian anti-Mafia authorities. The bank allegedly provided a state-secured loan to companies managed indirectly with Ndrangheta, the most prominent mafia organization in the United States.
According to the lawsuit, Centerbridge claims this is proof of a violation of the terms of the transaction.
Oaktree bought the bank that would become Banca Progetto ten years ago. At the time, the company’s loan book was small, at just €50 million ($54 million), but it soared rapidly in Covid Pandemic as banks would benefit from the Italian government’s support for domestic businesses. Loans had climbed to 7.6 billion euros by the end of 2023, according to a sales statement in September.
Banca Progetto risked not being able to prevent “crimes that deceive the state”, according to Centerbridge’s lawsuit. The investment company also cites the bank’s internal audit report, which mentions Banca Progetto’s credit process and “organizational flaws” in anti-money laundering.
Representatives for Banca Progetto and Oaktree declined to comment. A Centerbridge spokesperson did not immediately respond to a request for comment.
According to a statement on the website of Banca Progetto, the Bank of Italy began an investigation on March 21, which under a Milan court order. Measures to remove the bank’s board of directors may lead to restructuring or bank liquidation.
In a statement, Banca Progetto said the regulator adopted an “early intervention” aimed at “ensure adequate supervision” and “conditions for voice recovery and prudent management.”
– Assistance with Alberto Brambilla.
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