Seventh Progress Update received from the Special Liquidators of IBRC

The Minister for Finance, Paschal Donohoe T.D. today published the seventh Progress Update Report on the Special Liquidation of IBRC. This report was formally requested by the Minister for Finance, from the Joint Special Liquidators of IBRC, Mr Kieran Wallace and Mr Eamonn Richardson and is now available on the Department of Finance website.

Seventh Progress Update Report on the Special Liquidation of IBRC

Commenting on the continued progress being made on the liquidation, the Minister for Finance, Paschal Donohoe T.D. stated:

“This Report highlights the progress which the Joint Special Liquidators have made during 2019 in their continued efforts to wind up IBRC in a timely fashion. The repayment in full of all admitted unsecured creditors is a very positive development while the State were also repaid the full value in relation to their holding of the preference shares in the former Bank. The decreasing number of legal cases which the Joint Special Liquidators are managing is also a good indicator of the progress being made.

“The report highlights the likely impact which COVID-19 will have on winding up IBRC but I understand these challenges and I am confident the outstanding tasks will be completed to the same high standards we have seen over the last seven years. I would like to thank the Special Liquidators and their staff on their continued work.”

Alongside the Progress Update Report the Minister has also published a report prepared by RSM Ireland, commissioned by the Department of Finance, which has analysed the costs and outcomes of the Special Liquidation of IBRC to date with other comparable insolvencies internationally.

Desktop Review of Costs and Outcomes of Large Scale Liquidations - July 2020

ENDS

Notes for editors

1. The Special Liquidators have extended their timeframe for the final winding up of IBRC from end-2021 to end-2022. This delay can be largely attributed to the ongoing impact of COVID-19 which has resulted in delays to Court proceedings and asset realisation strategies.

2. The report states that fees incurred in the liquidation for the 12 month period to 31 December 2019 were €19.4m. The total fees incurred since the beginning of the liquidation in February 2013 to 31 December 2019 of €277m. The Special Liquidators have forecasted further fees of between €27.5m-€36m to complete the liquidation which will bring the total fees incurred to €304m-€313m.

3. The estimated timeline and estimated fees for the completion of the liquidation which is included in this Progress Update Report are based on a number of key assumptions including:

The current COVID-19 restrictions are lifted in a timely manner which allows legal proceedings to proceed with minimal further delays.
The current economic conditions do not delay the marketing for sale of the remaining assets by more than six months.
The on-going management of c. 50 sets of legal cases to which IBRC (in special liquidation) remains party are concluded and any appeals heard within the projected period.
No new material regulatory reviews or investigations which IBRC would be required to establish a special project team is assumed. Ongoing day to day regulatory interaction assumed.
No new material creditors attempt to submit a claim in the liquidation.
Liquidation of the remaining subsidiaries.
Wind down of the remaining loan book of c. €3.5bn during the projected period.
The realisation of all remaining assets during the projected period in an orderly manner without incurring significant transaction and tax costs.

4. The report prepared by RSM Ireland was commissioned by the Department of Finance following a competitive tender. Some of the key findings of the report include:

The hourly charge out rates applicable to the Special Liquidators of IBRC are lower than Irish ‘Court Approved’ rates, lower than average UK insolvency practitioner rates and lower than rates charged on comparable insolvencies included in the analysis.
The Special Liquidators of IBRC fees as a percentage of asset, liability, realisations and cash outflows are lower than the percentages observed in comparable cases.
An opinion has been formed that appropriate cost controls have been employed by the Special Liquidators of IBRC which was part of an overall control environment that included involvement and oversight from the Department of Finance.