Former building society directors sued over ‘catastrophic losses’

Four former directors of Irish Nationwide Building Society are seeking a large number of documents for their defence of legal proceedings in which they are being sued for tens of millions of euro due to the “catastrophic losses” suffered by the society.

Mr Justice Peter Kelly agreed yesterday to allow the directors additional time to prepare their defence in circumstances where the claims against them, brought by the special liquidators of IBRC into which the society was previously merged, extend back several years.

Various directions for exchange of legal documents mean defences will be provided by late October and the case will come before the judge again in late March when he is expected to fix a trial date. The trial is likely to last a long time, the judge observed in the Commercial Court.

Maurice Collins, counsel for IBRC, said while his side were prepared to take a constructive view towards providing most of the documents, it did not accept the defences could not be finalised without documents sought across some 13 categories.

Lawyers for the defendants said they needed longer than normally provided under court rules to prepare their defences and wanted various categories of documents to assist them in doing so.

The judge was also told yesterday there may be an application to have IBRC provide security for costs of the litigation but said he hoped that may not be necessary given the special liquidators confirmation in other proceedings that €50m would be ring-fenced to meet litigation costs, to be replenished when necessary.

IBRC has separately sued the four directors, former INBS chairman Michael Walsh, Stan Purcell, David Brophy, and Terence Cooney, and former chief executive Michael Fingleton.

INBS was nationalised in 2010 and later merged with Anglo Irish Bank into IBRC.

The focus of the cases is on the conduct of about 20 transactions subjected to a forensic examination by Ernst & Young and lawyers over the past three years.