Fortress Surrounded by Controversy On Dismissing Employees Heading to the Trade Union

15/07/2014 – El Confidencial

Fortress has made one the rare real deals in the financial world. The U.S. fund bought more than €1.1 billion worth of loans from Banco Santander and then sold them to Lindorff for double of the price. However, at the same time, the company chaired in Spain by José Manuel Cava (ex-executive at BBVA) dismissed nine workers, eight of whom pleaded a hearing at trade union committee. Also, in the meantime, two directors left the collection branch, Paratus AMC.

According to the firm´s employees, on Friday, nine people lost their jobs there, representing 10% of the entire staff based in Barcelona. The justification given stated that their work contracts had expired due to the portfolio transfer to Lindorff.

However, the real reason is said to be the preparation for the hearing in front of the Workers Commission by the nine ex-employees who were ready to defend rights of the entire, 90-person staff. In order to silence the criticism, Fortress has paid small perks (max. €1.000) to avoid claims at the courts.

Paratus´s call center operated from Monday to Friday, from 8 a.m. to 10 p.m. with two shifts. After many objections, the schedule was re-set from 10 a.m. to 6 p.m. Average salaries of the workers currently level to €17.000 annually, while the deafult scope they have to manage reaches 80.000 credits.

Lindorff acquired the non-collected loans from Fortress for only 3% of their true value. Moreover, Fortress obtained enormous returns from the customers who achieved amendments in repayment conditions and continued without tackling additional rates, as for each month when they fell behind with the payment, the fund charged them – and still does – with a 10% interest rate.

This is not the first time when Fortress is implicated in a controversy. Earlier this year, the fund and its partner Grupo Lar started to sell houses proceeding from Spain´s bad bank which had been already acquired from Sareb by private investors, cutting in prices by 65% in comparison with the homes traded by the fund.

Aside from the management of Santander´s loans, Paratus also administered the default of Novagalicia (now Abanca). The branch was directed by Scott Niven and Antonio Rizzo. According to financial sources, both of them stepped down.

In order to fill the positions in, Fortress hired José Cadena from Citigroup, prior to joining the bank also working for Galaxy Asset Management and West Asset Management.


Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE