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Almost ten years after the Arco debacle, a crucial lawsuit about the capsized investment company started on Wednesday before the Brussels company court. The court had counted on massive interest, but only a few dozen cooperators showed up.
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The case applies if it first major trial around Arco, the cooperative investment company of the Christian workers’ movement that went bankrupt almost ten years ago in the wake of the implosion of the Franco-Belgian financial group Dexia. Due to the demise of Arco, one of the main shareholders of Dexia, some 800,000 cooperative members saw a total of 1.5 billion euros in assets go up in smoke.
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The essence
- In the former NATO building in Evere, the pleadings began on Wednesday in the Arco lawsuit.
- The legal consultancy Deminor is requesting compensation for 2,172 cooperators of the capsized investment company of the Christian workers’ movement.
- According to Deminor, the cooperatives were misled for years by Arco, Belfius, the Belgian state and Arco top woman Francine Swiggers.
- The company court had counted on great interest, but in the end about twenty cooperators showed up.
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Nearly 2,200 cooperative members, guided by the legal consultancy Deminor, already started a procedure in 2014 to claim compensation. Seven years later, the first pleas begin before the Brussels company court. Because it had counted on a massive interest from duped cooperants, it decided to have the sessions take place in the former NATO building in Evere. That was recently converted into Justitia to handle major lawsuits.
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Twenty cooperants
But on the first day of the hearing, only about twenty cooperators showed up, less than the number of lawyers. ‘I risked my life coming here,’ laughs Jean Van De Vyvere, a former branch manager of Bacob, the predecessor of Dexia Bank and today’s Belfius. “With my pacemaker it is not easy to pass the metal detectors at the entrance.”
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During the pleadings, the lawyers of the co-operatives who joined Deminor emphasize that they were misled in several ways. ‘800,000 cooperators, one Belgian in fifteen, eventually became the victim of that deception,’ says lawyer Stijn De Meulenaer, who represents the cooperators of the Deminor case.
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According to the victims, the Arco products were wrongly presented as safe savings formulas while they were shares, ie risk capital on which there was no deposit guarantee. Bacob aggressively sold customers the Arco securities to fund its own expansion and pressured branch managers to sell as many as possible, attorney Stijn De Meulenaer said.
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‘Captain of the Titanic’
Even when the financial crisis had erupted and Arco was already virtually bankrupt, plenty of shares were still being sold. During his discourse, De Meulenaer even compared former Arco top woman Francine Swiggers with the captain of the Titanic. ‘He also asked people to stay on board because there was supposedly a party going on.’ The lawyer points out that Swiggers had mandates in all parts of the Arco group.
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‘She was involved in the controls and was aware of everything. But when everything was long gone, she insisted that there were no problems. She has done everything she can to minimize the business to avoid customers not leaving,” it said. De Meulenaer even goes a step further and accuses Swiggers of ‘pimping’ the Arco accounts. The financial fixed assets as expressed in the accounts of the investment vehicle were not presented correctly.
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The customers who were forced to buy Arco shares were allergic to risk. They didn’t even know what a stock is.
Jean van de vyvere
Former Bacob office director and Arco cooperative.
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Cooperative Jean Van De Vyvere, who also sold Arco products through his office, states that for years, both cooperative members and office holders have been fooled. ‘Our customers were allergic to risk. They didn’t even know what a stock is, so to speak. I also didn’t realize that the Arco securities were actually stocks. I still regret that today. People have played a reverse Robin Hood for years: taking money from poorer savers and giving it to the rich.’
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“I hope that through this case I can eventually see some of my money back,” says Robert Roose, who became a cooperative in 1981 and says he has lost 8,000 euros. “People have been misled, not to say deceived. No one ever told us that these were stocks and that one could lose one’s entire investment. I had also invested in Dexia shares. I can live with that loss, because I knew they were stocks.’
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Procedural Stroke
In its claim against the Arco companies Arcofin, Arcopar and Arcoplus (Arco for short), against Swiggers, against Belfius as the legal successor of the former Bacob Bank – the bank of the Christian workers’ movement – and Dexia Bank Belgium, and against the Belgian state.
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Arco acted like the captain of the Titanic. He also asked passengers to stay on board because there was a party going on.
Stijn De Meulenaer
Lawyer duped Arco cooperants in Deminor case
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After the pleadings, the court can in principle rule on the case in September. But there is a chance that a longer procedure will follow. One of the questions that the judge must rule on is whether the Deminor file should be merged with the proceedings that Arcoclaim has started. That interest group, which gathered 12,000 cooperative members, is conducting the proceedings before the Court of First Instance in Brussels.
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Arcoclaim also took part in the Deminor case after one of the cooperators who had joined Deminor switched. Deminor does not want to hear about combining the two cases, because it fears that the entire file will be put on the back burner again.
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