Rush Credit Union loan book set for market after winding up

The liquidator of Rush Credit Union is expected to market its loan book for sale this week after the High Court ordered the winding up of the community lender in north Co Dublin.

McStay Luby will seek to find a buyer for the loan book, which is understood to have a face value of about €9 million and comprises about 1,500 loans.

The liquidators will also seek to sell the credit union’s offices in the villages of Rush and Lusk. These were valued last year at €900,000.

It emerged from documents supplied to the court that Rush had paid €450,000 to members this year in redress for a car draw that had operated from 2009. A review of the draw by Grant Thornton had been unable to locate details of winners as no information was recorded or published on Rush’s website.

Some €220,500 had been expensed against 15 vehicles from November 2012 to April this year.

The documents also provide details on the alleged misappropriation of funds, suspected money laundering and a potential tax liability from payments to two contractors. These matters were reported to the Garda and Revenue by the regulator.

Compensation

Separately, the Central Bank, which applied for the winding up of Rush, said it had issued €22.3 million in compensation payments through the deposit guarantee scheme to 9,700 members of the failed credit union.

Some 10 staff continue to operate its office in Rush to accept loan repayments from customers.

The president of the High Court, Mr Justice Peter Kelly, confirmed the appointment of Jim Luby and Tom Rogers of McStay Luby as joint liquidators. They had previously been appointed on a provisional basis.

The judge ordered preparation of a statement of affairs of the credit union and adjourned the case to the High Court Examiners List in early January.

He said there should be a continuation of his earlier order providing for redaction of sensitive material in court documents which the Central Bank prepared in its application for the winding up.

The court heard earlier this month that Rush had net liabilities of €2 million and had a hole in its reserves of €4.73 million.

In a statement last night, the Irish League of Credit Unions said "every effort was made" to transfer the assets of Rush to neighbouring credit union, Progressive, a plan that fell apart in October.

“Due to the issues found during the due-diligence process it was not found to be feasible,” the league added. “Every credit union is an independent, autonomous entity and as such the resolution of Rush Credit Union does not impact upon the position of any other credit union. Overall, the credit union movement is strong and well capitalised.”