Unsecured creditors of IBRC to get liquidation payout
Liquidators seek details of claims from those owed money by former bad bank
The Minister for Finance Michael Noonan is entitled to submit a claim to the liquidators alongside the unsecured creditors on behalf of the State. Photograph: Eric Luke/ Photograph:
Unsecured creditors of the defunct Irish Bank Resolution Corporation (IBRC) are likely to share in a payout from its liquidation, it emerged yesterday.
The Government placed State-controlled IBRC, which housed the remains of Anglo Irish Bank and Irish Nationwide, in liquidation early last year in an effort to cut the Republic’s national debt.
Unsecured creditors, mostly businesses which suppled the bank with goods and services and which it was feared would not receive anything from the liquidation, are likely to be paid a dividend, although it is not known how much.
A Department of Finance note issued after the liquidation was announced in February 2013 conceded there was no guarantee unsecured creditors would get any payment.
However, the special liquidators, Kieran Wallace and Eamon Richardson, yesterday published formal notices in national newspapers, including The Irish Times, asking unsecured creditors so submit details of the amounts that they calculate are due to them, by March 31st next year.
It is understood there will be a pool of money left to pay unsecured creditors once secured and preferential liabilities are dealt with. At this point it is not known how much as the liquidators are in the process of selling the last of IBRC’s assets.
At the same time they may find themselves with other contingent liabilities and the final amounts due to the unsecured creditors themselves will also have to be calculated. As a result it is not known if they will be repaid the full amounts due to them.
One of those entitled to submit a claim to the liquidators alongside the unsecured creditors is Minister for Finance Michael Noonan, on behalf of the State.
Guarantee schemes He will able to claim for the €1 billion or so paid out to depositors under two guarantee schemes operated by the Government and administered by the National Treasury Management Agency.
Mr Noonan’s claim will rank as an unsecured debt and will be treated in the same way. Thus it is not known if it will be be paid in full.
Mr Wallace and Mr Richardson have sold about 90 per cent of the bad bank’s assets, which consisted mainly of loans secured against properties and businesses. At this point, €12.9 billion has been returned to the Central Bank.
Unsecured creditors rank behind the holders of secured liabilities, generally banks and other lenders, and preferential creditors, generally employees and the Revenue Commissioners, in a liquidation.
If the liquidation is the result of an insolvency, unsecured creditors, who are more often than not other businesses, are often wiped out as there is nothing left to pay them once the secured creditors are paid.