State to get €280m from IBRC liquidators

The State is to receive a €280 million payout from the IBRC liquidators in the next fortnight, as they make their first payout to the unsecured creditors of the former Anglo Irish Bank and Irish Nationwide.

The joint special liquidators of IBRC, Kieran Wallace and Eamonn Richardson of KPMG announced on Tuesday that most unsecured creditors are to receive 25 per cent of what they are owed in an interim dividend.

The State has a €1.12 billion claim as by far the biggest unsecured creditor, relating to money it paid to depositors in the failed financial institutions under the State guarantee when they were wound up. The payment will reduce the final total for cash borrowing by the Government this year.

Minister for Finance Michael Noonan said the outcome of the liquidation had so far exceeded expectations significantly. Anglo and Irish Nationwide were bailed out by the State at a cost of €35 billion. The amount raised by the liquidator indicates that this cost will not rise further and that in time a small amount may be recouped.

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In their progress report published last May, the special liquidators said they expected that unsecured creditors would eventually receive between 75 per cent and 100 per cent of what they are owed. Other unsecured creditors include credit unions who held Anglo Irish bonds, local authorities and trade creditors.

Statement

The special liquidators said in a statement on Tuesday there is no further update on the expected dividend range at the moment. The final outcome, they said, will depend on the price received for selling the remaining assets, the level of unsecured creditor claims ultimately agreed and the outcome of various court proceedings.

All told, at the time of IBRC’s liquidation, the group owed about €5 billion to unsecured creditors. However, almost €3 billion of this was made of intergroup borrowings between various units. The agreed unsecured creditors must be paid in full before any cash is paid to a group of junior bondholders, who are owed €285 million.

Losses

Most junior bondholders in the former Anglo Irish Bank accepted losses as part of a Government offer which imposed significant losses on their holdings. However a group challenged the State in the London courts and retain a claim. These junior bondholders stand at the back of the queue and are unlikely to receive anything before a legal battle between the family of businessman Seán Quinn and IBRC is heard, in 2018 at the earliest. The Quinns claim the lender, the Anglo Irish Bank, lent them billions of euro illegally in 2008 to shore up their investment in the bank.

A victory for the Quinns would see them join the list of unsecured creditors.

The liquidators were sitting on €2.2 billion of net cash as of February after selling off most of the group’s loan book.