TDs target ex gratia Tralee Beef deal
CATTLE farmers in the south west have won some powerful allies in their fight to recover up to €3.5 million left owing to them after the Tralee Beef and Lamb company collapsed in 2001. An IFA-led presentation of their plight to the Oireachtas Committee for Finance and the Public Service has brought the issue back into the limelight.
And with the families of two TDs among the aggrieved creditors, public representatives have vested interests as well as the interests of 300 farmers to defend.
Their work on behalf of creditors has led to a rare Fianna Fail-Sinn Féin alliance, with ex-Junior Minister Ned O’Keeffe and controversial Sinn Fein TD Martin Ferris leading representations with Anglo Irish Bank and Bank of Ireland, both involved in the receivership and liquidation of the meat processing company.
The two TDs made their strong feelings on the Tralee Beef and Lamb debacle clear in the recent Oireachtas Committee for Finance and the Public Service debate.
Deputy O’Keeffe told the Committee, “The status of the Bank of Ireland is no different in law from that of the people who sold the cattle.
“Anglo-Irish Bank is the real culprit as it held the security and debenture, but pulled the pin. I sympathise with the farmer creditors and both I and Deputy Ferris have been working on their behalf.
“Up to €776,000 has been paid back to Anglo Irish Bank, while the plant’s site was sold for €1.269 million. As there is now only €36,000 left, where has the difference gone?
“There are hardships in Kerry, north Cork and Limerick, but the Committee can do the business,” he promised the farmers who addressed the Committee.
He said the Committee’s role is to bring the banking groups together, and put a package in place, if possible, with an ex gratia or a compromise payment.
Such a payment, not compelled by legal rights, is seen as the best way forward, with Deputy O’Keeffe advising against a hardline legal approach.
IFA says it has not ruled out going to the courts on behalf of the creditors, but wants to explore every other possibility. IFA General Secretary Michael Berkery told the Oireachtas Committee, “Corporate law is a complex and expensive business and the victims in this case do not have deep corporate pockets to play this out for the next 10 years. Some solution must be found, such as an ex gratia payment.”
The Committee for Finance and the Public Service has corresponded with Anglo-Irish Bank and received an indication of their willingness to attend a public session of the committee, provided that its delegation is aware in advance of exactly what will be asked, revealed Committee chairman Sean Fleming, TD, Fianna Fail.
He told the Committee, “The bank made it clear it had a debenture incorporating a fixed and floating charge over all the assets of the company with the exception of the debtors, which we now know were covered by Bank of Ireland. Therefore, there were no assets not covered by one or other of the banks, through either the invoicing arrangement or the debenture.”
The Tralee Beef and Lamb collapse hit home in the families of Kerry TDs Tom McEllistrim of Fianna Fail and Martin Ferris of Sinn Féin. Deputy McEllistrim told the Oireachtas Committee, “I sent eight cattle to Tralee Beef and Lamb and received a cheque from it. I then bought replacement cattle at Castleisland Mart for almost the corresponding amount and handed over the cheque.
“The manager of the mart in Castleisland subsequently telephoned me and informed me that the cheque had bounced. Therefore, I know the situation well and the reason these farmers are here today.”
Deputy Ferris said he has intimate knowledge of the situation, because his brother is one of the creditors of Tralee Beef and Lamb. “The people who have really lost out and who have been hit by this situation are the smaller farmers from the Kerry area and parts of Limerick and Cork. Many of them depend on that cheque because it is their main income for the year. I know of some people who could sustain that loss, but many could not.”
He said it was grotesque, to say the least, that a bank such as the Bank of Ireland with a declared profit of €1.2 billion for this year, is prepared to allow this injustice against farmers in need to continue.
“Many creditors have stated that the bank was not honouring cheques. For the bank to now wash its hands of it is an absolute disgrace.
“Not only have the creditors lost out, Tralee has too. Up to 80 workers have lost their jobs.
“A good industry that had loyal support from the farming community in counties Kerry, north Cork and west Limerick is now gone. These people have had a grave injustice inflicted upon them.”
According to Deputy Jimmy Deenihan of Fine Gael, the reason so many farmers were caught out by the collapse of Tralee Beef and Lamb was that they were very loyal to the company.
“They had alternatives, but did not use them. They were so anxious to keep the plant going and to keep it alive. Unfortunately many of them suffered for their loyalty in the end.”
Independent Senator Joe O’Toole said the Tralee Beef and Lamb collapse is “an horrific story”, but it would be difficult to win a legal case.
He told the Committee, “Legislation was recently passed which requires auditors to sign off every financial year stating the company was trading properly, correctly and not recklessly. The legislation requires directors to state that to the best of their knowledge, they were not trading recklessly but in a compliant fashion.
“It was a great struggle to get this legislation passed. The Director of Corporate Enforcement fully supported it, while many Government and Opposition Members were slow to give such support. This case highlights why the legislation is important.”
