Newbridge Credit Union special manager agrees to reduce fees

Fees bill of €449,568 for six-month period cut by €55,000

 President of the High Court Mr Justice Nicholas Kearns was thanked by Bernard Dunleavy, for the directors of Newbridge Credit Union, for  his remarks that the special manager should have regard to the fact that fees had to be borne by the ordinary members of the credit union. Photograph: Alan Betson

President of the High Court Mr Justice Nicholas Kearns was thanked by Bernard Dunleavy, for the directors of Newbridge Credit Union, for his remarks that the special manager should have regard to the fact that fees had to be borne by the ordinary members of the credit union. Photograph: Alan Betson

 

Mary Carolan


The special manager of Newbridge Credit Union has agreed to reduce by €55,000 a bill of €449,568 fees sought to cover a six-month period up to January last. Luke Charleton of accountancy firm Ernst & Young will also receive an additional sum of almost €144,000 to cover fees and expenses for the 12 weeks to April 7th last.

Bernard Dunleavy, for the directors of the credit union (NCU), who had raised concerns about the “excessive” level of fees being sought, said they were not objecting to the reduced fees. He thanked the president of the High Court, Mr Justice Nicholas Kearns, for allowing time to address the issue and for his remarks that the special manager should have regard to the fact that fees had to be borne by the ordinary members of the credit union.

NCU chairman Ben Donnelly had previously said in an affidavit he did not see “how or why so many hours of professional time were required to oversee functions being carried out at a fixed cost by the staff of the credit union”.

While the Central Bank had asserted the special manager’s intervention had brought stability to the credit union, that was “very debatable”, he said.

In rejecting Mr Donnelly’s claims, Mr Charleton said in an affidavit the Central Bank had considered his appointment was necessary and he had been responsible for overseeing key changes in how the credit union operated. There were significant differences between the manner in which the credit union was run before his appointment and now, he said.

The total fees arising from the appointment of Mr Charleton are expected to exceed €2 million. The Central Bank, which sought the manager’s appointment, had not opposed the fee levels. Mr Justice Kearns had previously indicated there may have to be a forensic examination by the court of the actual work done to justify the fees.

From the point of view of a credit union with small depositors, the sums sought were “enormous”, the judge said, and suggested the Central Bank might take a “more active” role as to what fees were appropriate.

Mr Charleton had sought court approval of the fee rates but the directors sought full details of what work was carried out. Information in that regard was provided but further information was sought and there were also meetings and correspondence between the sides.

In an affidavit, Mr Charleton 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 at all times had 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.

He outlined a series of discussions, meetings and corespondence between his side and the directors which had not resolved, up to last month, the concerns of the directors about the fees. The fees sought were subject of prior scrutiny by the court and were at rates regularly approved by the courts in liquidations and examinerships, he said.

Mr Charleton was appointed under the Central Bank and Credit Institutions Resolution Act 2011 amid concerns about the credit union’s financial position. The Minister for Finance supported the extension of the appointment.