Delay in compensation payments to Custom House investors

Investor Compensation Company chairman critical of lack of progress in 1,428 claims

 John Whyte, former investment director, and  Harry Cassidy former chief executive officer of Custom House Capital.

John Whyte, former investment director, and Harry Cassidy former chief executive officer of Custom House Capital.

 

Some 1,428 claims relating to the collapse of investment firm Custom House Capital (CHC) in 2011 have not yet received their compensation due to delays in certification from the liquidator and administrator to the firm.

This has emerged from the annual report of the Investor Compensation Company Ltd (ICCL), which is charged with paying compensation to eligible clients of failed investment firms.

ICCL chairman Jim Bardon expressed his disappointment at the delay in providing the €12.6 million in compensation to those CHC clients.

“Despite our ongoing efforts to advance matters, I am disappointed that relatively little headway has been made in the certification of outstanding compensation claims in the CHC case,” he said.

“Notwithstanding the complexities arising in the liquidation of this firm, the prolonged wait endured by the eligible claimants concerned was never envisaged in investor compensation legislation.

“The ICCL has proposed to the liquidator that where possible, he should consider certifying the claims on an estimated or interim basis in order to accelerate the process. We will continue to seek progress in relation to all outstanding claims.”

Recommending changes

Mr Bardon said the delays in claims certification in the CHC case underscored the need to address issues with the prompt payment of compensation.

“The board of ICCL initiated a review of all aspects of the claims process with the objective of recommending changes that would ultimately improve the outcome for investors of failed firms.

“A report containing recommendations in a number of areas has recently been completed and sent to key stakeholders, the Department of Finance and the Central Bank, ” he said.

CHC is the largest case that the ICCL has dealt with since its inception. The firm was placed into liquidation by the High Court in October 2011, with Kieran Wallace of KPMG appointed as its liquidator and administrator.

To date, the ICCL has paid out more than €7 million to about 500 CHC claimants. Some 70 claims were certified by the administrator last year, resulting in payments of €186,617.

In total, ICCL received 1,977 claims for compensation from investors. The final compensation bill is projected at €19.7 million.

Separately, in February 2016, the Central Bank appointed Des Ritchie as administrator of AMT, a former authorised investment firm and ICCL has made a provision of €182,623 to cover compensation payments to its clients.

By July 31st 2016, ICCL had total reserves of €48 million, an increase of €4.7 million on a year earlier.