Rabobank abused power as banker of bankrupt company: report

Rabobank
. Source: Wikipedia/Lofor

Rabobank abused its position of power as banker of construction company Midreth, which went bankrupt in 2011, Financieele Dagblad reports on Thursday based on an unpublished judgment by the Arnhem-Leeuwarden Court of Appeal.

According to the court, Rabobank imposed "excessive" financial conditions on the construction company. That was in conflict with the bank's duty to care. Though the court added that there is no connection between Midreth's bankruptcy and Rabobank's measures.

Rabobank charged Medrith extra amounts for emergency loans, despite the company already having financial difficulties, according to FD. 

This verdict creates a precedent for people who want to challenge banks with legal proceedings, lawyer Gert Glas, who represented Midreth's owner, said to FD. According to him, people often only challenge some of a bank's measures. "But if you add everything up, as we have done, the judge will also notice that it stinks."

A spokesperson for Rabobank told the newspaper that the bank is studying the judgment and will later decide whether further steps will be taken.

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