Property investor Paddy McKillen has taken a legal case against the Minister for Finance, Paschal Donohoe, for failing to have proper oversight over the conduct and expected €300 million of fees linked to liquidation of Irish Bank Resolution Corporation (IBRC).
Department of Finance secretary general Derek Moran referred to the lawsuit, which was served on the Minister last October, in a letter sent to the Oireachtas Public Accounts Committee this week responding to various issues that came up at a committee meeting in May.
The proceedings initiated by Mr McKillen, who was a shareholder in IBRC's predecessor Anglo Irish Bank before it was nationalised a decade ago, are "largely identical" to a case that was launched by debt campaigner David Hall against the Minister in December 2017, which was widely reported on at the time.
While both parties have the same legal representatives, Mr Hall told The Irish Times on Friday that he has never had any dealings or contact with Mr McKillen. Mr McKillen wasn’t available for comment.
The Chief State Solicitor’s Office “is currently awaiting the submission of a statement of claim” in relation to Mr McKillen’s proceedings, Mr Moran said. “In the absence of a statement of claim, the precise nature of the case being pleaded by Mr McKillen is not known,” he said.
Anglo Irish Bank was renamed IBRC in 2011 and subsequently merged with fellow failed lender Irish Nationwide Building Society. IBRC was put into liquidation in early 2013 under a restructuring of the burden of the lenders' combined €34.7 billion taxpayer bailout during the financial crisis.
Wind-up costs
The latest liquidation report, published in May, said that wind-up costs for last year came to €10.8 million, bringing total costs for from February 2013 to €250 million, of which €153.6 million has gone to the KPMG liquidation team. Law firm A&L Goodbody has been the second-biggest recipient of fees, at €37.1 million.
With IBRC expected to be wound-up by the end of 2021, total liquidation costs are expected to reach €300 million.
Responding to a question as to why the Government didn't appoint a committee of inspection in relation to IBRC's liquidation, Mr Moran said that laws governing the wind-up disapplied provisions in the Companies Acts relating to such inspections.
‘Special powers’
“In the liquidation of IBRC, the IBRC Act gives the Minister special powers in overseeing the liquidation of IBRC – in particular, the power to issue instructions and directions to the special liquidators.”
In addition, after all creditors have been paid off, including the State, as envisaged, the Minister for Finance will be the only party with a continuing financial interest in the liquidation of IBRC, as its sole shareholder, Mr Moran said.
