Inside the world of business
Forum shopping becomes a worrying development
IT WAS a busy day in court six in the Four Courts building in Dublin yesterday, with a room full of lawyers, and people representing themselves, waiting to be heard by Ms Justice Elizabeth Dunne on bankruptcy matters.
The main focus for the media was former billionaire Seán Quinn, though the former hunger striker turned property developer, Thomas McFeely, was also up for mention. His lawyers told the judge they had been taken by surprise by the successful application by McFeely in England on Friday to be adjudged a bankrupt there.
Dublin woman Theresa McGuinness, who won a High Court award of over €100,000 in 2009, but has not received payment, has been pursuing the Priory Hall developer. She was also taken by surprise by Friday’s development. Ms Justice Dunne advised her she could initiate secondary proceedings against McFeely, or seek to have the English adjudication annulled.
Quinn, of course, had his November adjudication in Northern Ireland annulled earlier this month, allowing for yesterday’s development in the Dublin courts. In his judgment in Belfast, Mr Justice Donnell Deeny referred to the May 2000 regulation by the Council of the European Union that governs these matters, and quoted recital four of the preamble.
“It is necessary for the proper functioning of the internal market to avoid incentives for the parties to transfer assets or judicial proceedings from one member state to another, seeking to obtain a more favourable legal position (forum shopping).”
Forum shopping appears to be all the rage these days, however, with a steady stream of former property developers shifting home to England and leaving their debts behind on these shores. Perhaps a challenge by McGuinness to McFeely’s move might bring a halt to their canter.
Lenihan’s credit line idea worth revisiting
ALL THAT talk of a second bailout for Ireland – as floated by Citigroup economist Willem Buiter last week – rightly received a cool reception in official quarters given how Ireland had become the best performer in the austerity parade. But the idea of having a plan B in reserve is hardly a bad thing if Ireland crashes and burns on its return to the bond markets. The point is that no one really wants to discuss the alternative publicly.
One possibility if Ireland could not borrow on its own account is the setting up of a precautionary credit line from the EU bailout fund, the European Financial Stability Facility. Such a safety net would provide the Government with a backstop should it not be able to build up enough to clear its first post-bailout hurdle – a €11.8 billion bond repayment in January 2014.
Ironically, a precautionary credit line was one idea suggested privately by the late minister for finance Brian Lenihan in an attempt to avoid the first EU-IMF bailout in the autumn of 2010. Lenihan thought that a standby facility to avoid a fully-fledged EU-IMF loans programme could cover the country’s borrowing needs in the second half of 2011 as the country was fully funded until the middle of that year.
While a precautionary EFSF credit line may not be foremost on officials’ minds, the troika are understood to be open to the possibility of cutting the Irish banks some slack on their end-of-2013 deleveraging target.
The Central Bank and Department of Finance have said that offloading assets in a deteriorating European banking sector could exacerbate losses for the banks. The troika appears to be open to discussions around new ways of allowing the banks to shed excess assets to avoid costly fire sales. The concept of warehousing loans to ride out the European banking and debt crisis is certainly a more pressing precaution to be considered right now.
Health warning for future medical spending
THE HEALTHCARE sector is facing up to stark truths as budgets continue to tighten and innovation continues to fund new ways of keeping us healthier, and alive, for longer.
Bill Doherty, the European head of privately owned US medical devices group Cook, was addressing the issue in the aftermath of his companys recent announcement of a €16.5 million investment in a new RD unit at the company’s Limerick plant.
He noted that, with some projections putting future healthcare costs as high as 25 per cent of GDP by 2050, there is a need to review the model of largely free healthcare on demand.
“There are a lot of medical procedures that people have to have. But then there are elective procedures and choices within those electives,” he said. “So maybe there will come a time when basic procedures are provided but if you want to start making choices then you pay for it.”
While he was unable to second-guess what any new model would look like, he was adamant the current one “is certainly unsustainable”. While Cook’s Irish plant – producing drug eluting stents that keep open arteries in the legs of people with cardiovascular disease or diabetes in a move that can avoid the need for amputation and aftercare that is punitive in cost – is not likely to suffer under such a revamp, it is notable that a senior industry executive is acknowledging that even more cost-effective treatments may ultimately run out of budget under the current system.
TODAY
Drinks group C&C reports interim figures as retailers gather in Dublin for the Checkout conference which will be addressed by Bord Bia chairman Michael Carey.
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