LONDON, Aug 20 (Reuters) - Junior bondholders of Portugal’s Banco Espirito Santo have selected law firm Shearman & Sterling to represent them in a challenge to the way the bank was split, a source familiar with the situation said.
Shearman & Sterling will sign a letter of engagement imminently and will make contact with the Bank of Portugal and other relevant parties to outline bondholders’ concerns over the next day or two, the source said.
The Bank of Portugal announced on Aug. 3 that most of BES’s business was to be moved into a new bank called ‘Novo Banco’, while its troubled loans to companies linked to its founding Espirito Santo family would remain at BES.
Under the plan, the junior bondholders’ claims stay with BES.
Reporting By Laura Noonan; Editing by Chris Reese