Effects of invalidity of the subscription of preference shares and subordinated debentures
The effects of contractual invalidity of preference shares and subordinated debentures in Spain are regulated in the Article 1303 of the Civil Code. This provision defines “restitutio in integrum” with feedback “ex tunc” it to the previous event time invalidator.
However, the judgment of the Pontevedra Provincial Court, Section 1, of 4 April 2014 (106166/2014 Law) is showing the progress of the jurisprudence stating no place to return by the purchaser of products hybrids of interest received, based on the following reasons:
a) Existence of a situation of inequality in the information and imbalance of rights and obligations
b) Acting in bad faith by the banking entity
c) Unjust enrichment
d) Increase the standard of good faith required contractual financial institution through the protective consumer legislation
e) Consideration of preference shares and subordinated debentures are irregular banking practices
This publication derives from the laconic situation found in the development of professional practice team forming claim&loyaltySociety Lawyers in relation to the protection of consumer banking, which is why the legal firm expects them to be able to be of assistance in order to elucidate their doubts.