Cantillon: Silence is not golden for Newbridge Credit Union members
A total bill of €2 million may result from the appointment of the special manager
President of the High Court Mr Justice Nicholas Kearns suggested the Central Bank might take a “more active” role as to what fees were appropriate in relation to Luke Charleton’s work for Newbridge Credit Union. Photograph: Alan Betson
There was an intriguing line from the courts yesterday in relation to Newbridge Credit Union.
Counsel for the credit union’s directors, Bernard Dunleavy, outlined their concerns about the “complete information blackout” coming from the special manager appointed in January 2012 by the Central Bank, Luke Charleton, and their impression that they were not being listened to in relation to whatever plans for the future of the credit union might be under consideration.
If, for example, counsel said, there was a transfer order to another credit union, that would be done ex parte – with only one side represented in court – and the directors would only get 48 hours to comment on the application.
Nothing much else was given on this idea but it is interesting to think how it would be received by those who have money in, or loans out from, the credit union. Newbridge had more than 37,000 members back in January 2012 when Charleton was appointed.
The members are having to foot the not-inconsiderable bill for the Ernst & Young accountant’s work on sorting out matters at the credit union. In April, he agreed to reduce by €55,000 a bill of €449,568 in fees sought to cover a six-month period up to January last.
At that time the president of the High Court, Mr Justice Nicholas Kearns, commented that, from the point of view of a credit union with small depositors,
the sums sought were “enormous”, and suggested the Central Bank might take a “more active” role as to what fees were appropriate.
Charleton, for his part, said the fees granted to him to date, based on rates fixed by the court, were below his standard charge and rates, and below the rates of Ernst & Young. He had at all times charged on the basis of the rates fixed by the court and, when the second extension of his appointment was granted, had volunteered to cap his fees at €9,500 a week based on a “business as usual” model, plus VAT and out-of-pocket expenses.
It has been said that a total bill of €2 million may be expected arising from the appointment of the special manager.
If the members find themselves the subjects of transfer orders that see their accounts being moved to another credit union as part of a resolution to the
Newbridge issue, one wonders what they will think of the bill involved, not least if what they get in return for their money is the need to make the occasional round trip to some neighbouring town.