Court rejects PTSB investor group’s 2011 bailout challenge

The High Court has ruled against a group of small investors in Permanent TSB, who had challenged the State's move in 2011 to inject money into and seize control of the then-ailing lender.

In a ruling delivered on Monday, Ms Justice Iseult O'Malley said that the investor group, including Piotr Skoczylas, Gerard Dowling and Padraig McManus did not succeed in demonstrating that former minister for finance Michael Noonan gave an "unreasonable" opinion to the High Court when he secured a court order six years ago to take over the group, then called Irish Life & Permanent (IL&P) to prevent it from collapsing.

The court order in July 2011 was secured under temporary emergency laws, enacted in late 2010, which gave the State extraordinary powers to stabilise the financial system as the cost of bailing out the State’s ailing banks pushed the Republic into an international aid programme.

Rescue

PTSB cost the State €2.7 billion to rescue, excluding the €1.3 billion it received from the sale of the group’s Irish Life division to Canada’s Great West Lifeco in 2013.

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In 2014, the High Court stayed the legal case, which was led by Mr Skoczylas, as it referred two questions relating to it to the Court of Justice of the European Union. Last November, the European court decided that the Minister did not breach EU law with regard to shareholders' rights when he recapitalised the lender.

The High Court in Dublin held a three-day hearing in March, before Ms Justice O’Malley made her ruling on Monday.

Mr Skoczylas, who succeeded in securing a seat for a period on IL&P’s board as he waged his high-profile battle against the then government, said investor groups plan to appeal the ruling.

“I am fully confident that the ultimate outcome of the case will be in favour of the shareholders,” he said.

Separately, Mr Skoczylas and 48 other PTSB investors initiated separate plenary proceedings in March under EU law.

The investor is also leading a constitutional challenge of the emergency laws – or Credit Institutions (Stabilistion) Act 2010 – under which Mr Noonan made the 2011 order in question.

All told, Mr Skoczylas has initiated 11 legal challenges, including unsuccessful attempts to stop the sale of Irish Life and the initial public offering of PTSB two years’ ago, in which the State’s stake in the lender fell from over 99 per cent to 75 per cent.