Court confirms appointment of liquidators to Drumcondra credit union

The president of the High Court has confirmed the appointment of liquidators to Drumcondra and District Credit Union in Dublin. Ms Justice Mary Irvine granted orders sought by the Central Bank confirming the appointment of Stephen Tennant and Nicholas O’Dwyer of Grant Thornton.

They had been appointed joint provisional liquidators by the court earlier this month. The court heard on Friday there was no appearance on behalf of any of the credit union’s creditors. One of its directors, Rory Flynn, said he was present in court as an observer.

Brian Kennedy SC, for the Central Bank, said there had been a co-operative approach to the liquidation by the directors.

About 95 per cent of members had received payments in relation to their deposits under the Government’s deposit guarantee scheme which guarantees deposits of up to €100,000.

The Central Bank said earlier this week that compensation of about €12.9 million had been paid to 4,600 members of the credit union following its collapse.

Further information is sought in relation to the other 5 per cent as it involves members who may be deceased or have moved home, counsel said.

The court heard, in an affidavit from one of the joint provisional liquidators, Mr O’Dwyer, that a number of steps had been taken so far in the liquidation. Three employees had been engaged on a temporary basis to help run the credit union business as it prepared for insolvency, he said.

There was a total of just over €90,000 in cash and cheques retrieved from the premises and there was some €8.4 million in investments, managed by Davy stockbrokers, €2.5 million of which was readily accessible.

Valuation

Steps have been taken to have its Upper Drumcondra Road premises valued, counsel said. Regarding its loan book, he said the liquidators were in the process of preparing an information memorandum and hoped to have that ready by August 20th.

A number of creditors including Revenue have not responded yet, he said. If members wish to transfer their savings, which are covered by the deposit guarantee scheme to another credit union, the insurance benefit their deposits enjoyed will be transferred as well, providing it is done before August 20th, he said.

In the application earlier this month to appoint provisional liquidators, the court heard the Central Bank was involved in extensive efforts to ensure the credit union addressed financial viability issues.

These related to the value of its Drumcondra premises. In 2016, it received financial support from the Irish League of Credit Unions with the aim of restoring the legally required position that it have a minimum reserve of 10 per cent of total assets.

Last year, the credit union pursued merger options but ultimately failed to execute that option due to an inability to secure external funding to restore its capital position required prior to any merger.

Ms Justice Irvine said the provisions of the Central Bank and Credit Institutions (Resolution) Act 2011 had been satisfied and she made the order sought by the bank which she said was also entitled to its costs along with the liquidators.