Credit union faces €1.25m bill as special manager stays

The President of the High Court has extended the appointment of a special manager to Newbridge Credit Union to next summer, which will increase to €1.25m the costs to 37,000 members of that appointment sought by the Central Bank.

In response to concerns of the credit union’s directors about what plan was being pursued for it, Mr Justice Nicholas Kearns also asked special manager Luke Charleton to deliver a report to court next April outlining what strategy was being pursued and what progress had been made.

The judge also asked Mr Charleton to consider various proposals advanced by the directors, including lowering the level of bad debt provisioning and extending time for repayment of loans.

He recognised the very difficult position of the directors in circumstances where Mr Charleton had taken over their functions.

He was giving his decision on an application by the Central Bank to extend the appointment of Mr Charleton for another six months to Jul 2012. He was appointed last January amid concerns about the credit union’s financial position and his appointment was extended last July to mid-January next.

Rossa Fanning BL, for Mr Charleton, supported the extension application.

The court heard Mr Charleton, of accountancy firm Ernst & Young, had said he would cap his fees at €9,500 weekly, unless additional work had to be undertaken.

With that cap, his fees, paid by the credit union’s members, will be €250,000 over the next six months, plus €1m paid since January last, the court heard.