Dáil debates

Wednesday, 19 December 2018

Ceisteanna ó Cheannairí - Leaders' Questions

 

12:05 pm

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael) | Oireachtas source

That clearly indicates the priorities of Sinn Féin during the busiest and most important week of a Dáil session. To answer the question, the special liquidators of IBRC announced yesterday that they will shortly commence the payment of the final dividend of 50% to admitted unsecured creditors of IBRC. This payment represents the final instalment of amounts owed to this class of creditors of which the State - the Irish Government and the Irish people - will be the single largest beneficiary. As a result of this transaction and this liquidation, the State is now in line to receive €600 million in the coming weeks. This is €600 million out of the liquidation of IBRC that we - the State and Irish people - never thought we would see again.

The joint special liquidators of IBRC also confirmed yesterday that it is their expectation that further funds will be available for return to the State following the expected repayment of other creditors, including subordinated bondholders. The joint special liquidators have given no timeframe regarding the commencement of any payments to subordinated bondholders who are owed €267 million, which is less than half of what the State will get. The outcome of the liquidation has far exceeded expectations at the time of the liquidation in 2013. Not only has the State recovered the full amount in guaranteed payments incurred as part of the transaction, we now stand to receive further funds in the coming years.

Despite extensive liability management exercises, LMEs, undertaken by IBRC in 2010 and 2011, which significantly reduced the cost of the bailout to the State by €4 billion, approximately €267 million of subordinated debt remained in the bank when it was liquidated in February 2013. This debt remained in situfollowing LMEs due to legal issues impacting the success of those exercises. Under the rule of priority, the distribution of assets under the Companies Acts, these creditors are now entitled to repayment as the next class of creditor in the liquidation. The Department of Finance has received legal advice that indicates that any move to change the priority of distribution would be open to successful legal challenge.

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