IBRC liquidators miss PAC hearing amid legal action over fees

The special liquidators of Irish Bank Resolution Corporation turned down an invitation to appear before the Oireachtas Public Accounts Committee (PAC) on Thursday for a hearing on the cost of bank bailouts, citing legal advice after a legal action was initiated last week relating to the firm's wind-up fees.

The liquidators, Kieran Wallace and Eamonn Richardson of KPMG, have offered, however, to answer questions from members of the committee once the litigation has been dealt with.

Officials from the Department of Finance also told the committee on Thursday that they have been advised by the Attorney General that they could not discuss the cost of IBRC's liquidation at the hearing.

Legal action

It follows a move by debt campaigner David Hall to initiate a legal action against the Minister for Finance, Paschal Donohoe, for allegedly failing to have proper oversight over €222.5 million of fees tied to IBRC's liquidation up until last February.

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The proceedings allege that expenses paid to the special liquidators are not subject to “any real and substantive assessment”. The fees are paid out of the sale of IBRC’s assets.

"We are very disappointed and frustrated that we are not able to discuss the [liquidation]," Des Carville, head of the department's banking unit, told the PAC hearing. "I believe we have a very good story to tell."

Mr Carville said the State has published four detailed reports since IBRC, formerly Anglo Irish Bank and Irish Nationwide Building Society, had entered the liquidation process, in order to give transparency about the costs and other matters relating to the winding up of the lender.

He added that the department had seen a plenary summary of the legal action but had not yet received a statement of claim from the litigant.

“I don’t know where this is going to go,” he said.

The response drew criticism from a number of PAC members, including Fianna Fáil TD Marc MacSharry, who said: "The new way of avoiding questions and appearing at the Public Accounts Committee is simply to say: 'I have legal advice – I'm saying nothing.'"

IBRC’s liquidators said last week that the State, the failed lender’s main creditor, will receive a second €280 million payment in the coming weeks. This comes as the liquidators make a second 25 per cent dividend payout, following a similar amount announced in December 2016.

The State has a €1.12 billion unsecured claim on IBRC. The latest payout will bring the total dividends transferred to the State up to €560 million. Total senior unsecured claims that have been acknowledged by the liquidators currently amount to €1.3 billion, department officials said on Thursday.

Claims

A total of 3,000 claims were submitted to the liquidators before a deadline last year, 1,200 of which were accepted, 1,000 rejected and 800 are still being processed, they said. Mr Carville said it is still not possible to predict whether subordinated bondholders, who avoided having losses inflicted on them during the crisis and who are owed about €300 million, will receive any of their money back.

The Comptroller & Auditor General estimated in its latest annual report on the accounts of the public service, published earlier this year, that the net cost of the €68.8 billion total bailout of the country’s lenders during the crisis stood at €39.9 billion at the end of December.

The calculation included cash received up until last year from the banks in repayments, interest and guarantee fees, as well as an estimated Central Bank surplus relating to a refinancing of IBRC’s bailout and value of the State’s remaining bank stakes. The Government subsequently raised €3.4 billion in June from the sale of a 28.8 per cent stake in AIB.