Four former directors of Irish Nationwide Building Society are seeking a large number of documents for their defence to proceedings in which they are being sued for tens of millions of euro due to the "catastrophic losses" suffered by the society.
Mr Justice Peter Kelly agreed yesterday to allow the directors additional time to prepare their defence in circumstances where the claims against them, brought by the special liquidators of the Irish Bank Resolution Corporation (IBRC) into which the society was previously merged, extend back several years.
Various directions for exchange of legal documents mean defences will be provided by late October and the case will come before the judge again in late March when he is expected to fix a trial date. The trial is likely to last a long time, the judge observed.
Maurice Collins SC, for IBRC, said while his side were prepared to take a constructive view towards providing most of the documents, it did not accept the defences could not be finalised without documents sought across some 13 categories.
Lawyers for the defendants said they needed longer than normally provided under Commercial Court rules to prepare their defences and wanted various categories of documents to assist them in doing so.
The judge was also told yesterday there may be an application to have IBRC provide security for costs of the litigation but said he hoped that may not be necessary given the special liquidators’ confirmation in other proceedings some €50 million would be ring-fenced to meet litigation costs, to be replenished when necessary.
IBRC has separately sued the four directors – former INBS chairman Michael Walsh, Stan Purcell, David Brophy, and Terence Cooney – and former INBS chief executive Michael Fingleton.
IBRC claims losses of €6 billion suffered by INBS from 2008 to 2010 arose mainly from development loans made while Mr Fingleton was chief executive. Had the true picture of INBS’s affairs been disclosed, Mr Fingleton would have been summarily dismissed for breach of duty by 2007 at the latest and not paid expenses inappropriately incurred, plus some €1.2 million performance bonuses for 2008 and 2009 when he left, the liquidators claim.
It is alleged an “unusual” management structure had operated under which the board effectively delegated its powers over years to Mr Fingleton. It is claimed he allegedly authorised many loans without prior board approval.