Irish Nationwide Building Society case settled

A legal action against four former directors of Irish Nationwide Building Society (INBS) over alleged “wholly unlawful” delegation of powers of the board of the INBS, to its former CEO Michael Fingleton, has settled, the Commercial Court heard yesterday. No terms of settlement were disclosed.

A separate action against Mr Fingleton, involving a claim by State-owned Irish Bank Resolution Corporation for up to €6bn over losses suffered by the INBS, is proceeding on a date yet to be fixed. Mr Fingleton denies any liability, has pleaded he was not negligent and had prudently sought to reduce the INBS’s exposure.

IBRC, which took over INBS, had separately sued John Stanley Purcell and three other former INBS directors — former chairman Michael Walsh, Terence Cooney and David Brophy — over alleged breach of contract, breach of duty and negligence over the alleged delegation of the board’s powers to Mr Fingleton from 1997 to 2009.

INBS was later nationalised with losses of €6bn.

All four directors denied the claims and Mr Purcell last year secured orders joining the Central Bank as a third party to the case against the directors. He alleged the bank had a liability over alleged failures to properly monitor and regulate the INBS concerning the alleged delegation of the board’s powers to Mr Fingleton. The bank and other state entities had joined together in exposing him to a “wholly unmeritorious” claim for damages of more than €1bn, he also claimed.

Mr Purcell also complained IBRC, in bringing its proceedings against the directors, had not joined accountancy firm KPMG, the former auditors of INBS, as a defendant to the case. KPMG had been joined as a third party. As Ms Justice Caroline Costello was about to give judgment on discovery issues raised by the defendants in both cases, Neil Steen, counsel for Mr Purcell, said the case against the former directors had settled.

The case was adjourned for a month and the discovery matters concerning the directors were struck out. The judge noted the case against Mr Fingleton is proceeding and also adjourned that.