Pearse Doherty (Donegal South West, Sinn Fein)
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227. To ask the Minister for Finance if he will provide an update on the liquidation process at Irish Bank Resolution Corporation. [48247/14]

Michael Noonan (Limerick City, Fine Gael)
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The Special Liquidators continue to implement the orderly and efficient winddown of Irish Bank Resolution Corporation Limited (in Special Liquidation) ( IBRC ) in accordance with the provisions of the IBRC Act and the instructions issued by the Minister for Finance under the IBRC Act 2013.

As the Deputy is aware, for operational reasons, the loan assets of IBRC were divided into six portfolios: Evergreen, Sand, Rock, Salt, Stone and Pebble. In total, there were 15,734 Borrower Groups comprising 24,632 loans for sale across the 6 portfolios.

In April 2014, the Special Liquidators announced that the initial loan sales process had concluded. The sales process of the IBRC loan assets delivered a very positive result with over 90% of the loan assets (with a par value of €21.7bn) being sold.

Following instructions from the Minister for Finance, NAMA are no longer obliged to purchase the unsold IBRC assets at their independent valuation as previously envisaged, as the expected proceeds to be raised from the sale of the IBRC loan assets will be sufficient to fully repay the IBRC debt to NAMA (this debt has since been fully repaid). Therefore, the Special Liquidators devised a further sales process in respect of the unsold loan assets to maximise the return to all remaining creditors of IBRC, including the State.

The Special Liquidators have corresponded with all those remaining Borrowers of IBRC whose loan assets were not sold in the first sales process providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. Consideration was given to these Borrower representations and the Special Liquidators responded to these Borrower representations.

This sales process is currently underway and the Special Liquidators are unable to quantify at this stage the total sales proceeds that will be achieved from this process. The Special Liquidators expect the sales of the remaining loan assets to be completed before 31 December 2014.

In tandem with the further sales process, the Special Liquidators have published advertisements and written to those known creditors in order to finalise their claims in the liquidation. Creditors in the UK and Ireland have until 31 March 2015 to submit their claims and those creditors in the US have until 31 May 2015.

Once all claims have been submitted, they will be reviewed in detail and adjudicated on by the Special Liquidators. In order to finalise this process, further information may be sought from some creditors in order to validate their claim.

It will be some time before the Special Liquidators will be in a position to advise on the likely dividends to be payable to creditors given:

1. The early stage in the creditor adjudication process;

2. The other contingent liabilities that may crystallise from litigation; and

3. The future receipts from the sale of the remaining assets.

Billy Timmins (Wicklow, Independent)
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228. To ask the Minister for Finance if the Irish Bank Resolution Corporation junior bondholders will receive payment as part of the liquidation process; if there is a legal requirement to do so; and if so, if there are plans to amend the law; and if he will make a statement on the matter. [48287/14]

Michael Noonan (Limerick City, Fine Gael)
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The Special Liquidators continue to implement the orderly and efficient wind down of Irish Bank Resolution Corporation Limited (in Special Liquidation) in accordance with the provisions of the IBRC Act and the instructions issued by me under the IBRC Act .

In April 2014, the Special Liquidators announced that the loan sales process had concluded. The sales process of the IBRC loan assets, including their segmentation to meet demand from international buyers, delivered a very positive result with over 90% of the loan assets (with a par value of €21.7bn) sold.

Following instructions issued by me, NAMA are no longer obliged to purchase the unsold IBRC assets at their independent valuation as previously envisaged, as it became clear that the expected proceeds to be raised from the sale of the IBRC loan assets would be sufficient to fully repay the IBRC debt to NAMA.

The Special Liquidators have therefore devised a further sales process in respect of the unsold loan assets so as to maximise the return to all remaining creditors of IBRC, including the State. This sales process is currently underway and the Special Liquidators are unable to quantify at this stage the total sales proceeds that will be achieved from this process.

As the Special Liquidators maximise the proceeds of the liquidation, it is important that they have a comprehensive view of the creditors who ultimately may be entitled to these proceeds. To this end, the Special Liquidators have published advertisements and written to those known creditors in order to finalise their claims in the liquidation. Creditors in the UK and Ireland have until 31 March 2015 to submit their claims and those creditors in the US have until 31 May 2015. 

Once all claims have been submitted, they will be reviewed in detail and adjudicated on by the Special Liquidators. In order to finalise this process, further information may be sought from some creditors in order to validate their claim.

The Special Liquidators are unable to comment at this stage both on the level of proceeds that will ultimately be generated from the liquidation and on the level of valid creditor claims that will ultimately be received in respect of the liquidation. It is the balance between the proceeds generated by the liquidation and level of valid claims received and approved that will ultimately determine the dividend to which each creditor may be entitled. The ultimate level of dividend, if any, paid to each creditor cannot be known until such time as the sales processes are complete, the total level of adjudicated creditors is finalised and the other contingent creditor claims which may crystallise, including those from litigation, are known.

It is understood that for the payment of proceeds from the liquidation, preferred creditors and senior unsecured creditors will rank in priority to the holders of subordinated debt. The priority for the distribution of assets under the Companies Acts is generally:

i. costs and expenses of the ongoing liquidation;

ii. preferential creditors, including certain taxes and employee and pension claims arising prior to the date of liquidation (these claims are certain to be paid in full)

iii amounts owing to NAMA under the Facility Deed acquired from the Central Bank which were secured by a floating charge over the banks assets (this debt is now fully repaid and so the floating charge is now released)

iv. unsecured creditors, including:

- Debts owing to the Minister/NTMA under ELG and to DGS

- Unguaranteed debt/depositors (including holders of tracker bonds etc.)

- Unknown, including:

- Local authority development bonds

- Suppliers/other normal unsecured creditors

- Employees that are not preferential creditors

- Contingent creditors and other potential costs principally relating to litigation etc 

v. subordinated creditors

vi. Members of the company - the Minister currently holds 100% of all shares and preference shares in the company.