WHAT YOU NEED TO KNOW ABOUT THE DEBT DEAL
Q.
A. Not until the liquidator officially winds it up, which is expected to take at least six months. In the meantime, the liquidator keeps it artificially alive, selling off its assets, paying down its debts and transferring ongoing business to Nama. That process is expected to take at least six months.
Q.
A. If you have up to âŹ100,000 on deposit, you donât need to worry as the Stateâs open-ended Deposit Guarantee Scheme is in place and fully protects sums up to that limit. If you have more than that at stake, the excess might be protected under the short-term Eligible Liabilities Guarantee, which also covers bonds and various sorts of securities. But the ELG exists on a rolling, six-month basis and the current guarantee period runs out at the end of June this year and there is no certainty it will be renewed. Also, sums guaranteed under this scheme will have to have been lodged within a certain timeframe, so restrictions may apply. If you fall outside the guarantees, youâll be joining the queue with all the IBRCâs other unsecured creditors looking to get their money back from any surplus that might remain after IBRC assets are sold off and priority debts are paid. It is doubtful, however, that there will be a surplus. Either way, you need to check that you still have deposits in IBRC â the majority of them were transferred to AIB and Permanent TSB two years ago and they will be unaffected by IBRCâs liquidation. Most of the remaining IBRC depositors also have loans owing to the bank so the liquidator will be working to tidy up those transactions.
Q.
A. The liquidator will try to sell off some of the loans to third parties so you could end up owing to some other financial institution. Those that are not sold will be transferred to Nama, who will take over the job of trying to get them repaid, so thatâs who youâll be hearing from in future.
Q.
A. In the short-run, the liquidator will be in charge of it so you keep paying it in the same way at the same interest rate and under the same terms and conditions as before IBRC went into liquidation. The liquidator will try to sell off IBRC assets, which includes mortgages, so down the line you could be dealing with a different financial institution. Mortgages not sold off will be transferred to Nama so thatâs who youâll be repaying.
Q.
A. Where IBRC has been pursuing a claim against a debtor or other third party, that claim will be unaffected as the liquidator and subsequently Nama or another financial institution that takes on IBRC business will have the power to continue the legal process.
So, for example, the high-profile claims against SeĂĄn Quinn and his family will continue. But where someone or some institution has taken a case against IBRC, that matter is automatically put on ice and the claimant will have to prove to the liquidator that they are owed a debt and that they should be allowed to pursue it.
They will have to take their chances with the rest of the unsecured creditors and hope that there might be some money left to pay them once the liquidation process is complete.
Anyone who was planning to take a case against IBRC, but had not issued formal proceedings before the liquidation began, will now have to ask the courts for permission to proceed.
Q.
A.They will be unaffected and prosecutions against individuals already charged with offences will proceed as normal.
Q.
A. Their contracts were terminated with immediate effect and they are being re-employed on monthly contracts as long as the liquidator needs them, so some may be kept on longer than others. Once the bulk of IBRCâs business is transferred to Nama, it is likely many employees will be rehired there, while others will be in a good position to get employment with other financial institutions that buy up IBRC loans and mortgages. There are no guarantees about future employment, however, or whether staff would enjoy the same attractive pay and conditions IBRC offered.
They will all be entitled to statutory redundancy payments regardless of future employment. Statutory redundancy is two weeks pay per year of service, capped at âŹ600 per week.
Q.
A. The 10 most senior executives have also had their positions terminated with immediate effect and according to the Department of Finance âno longer have a roleâ, so it seems unlikely any of them will be rehired. They do, however, âowe obligationsâ to IBRC, so where they were in the middle of a crucial task â the preparation of a statement of assets and liabilities is the example used â they will be expected to complete it. Some of the executives were on very lucrative contracts and some, like chief executive, Australian Mike Aynsley, moved from overseas to take up posts here so there are concerns they may feel they have grounds for legal action given the way their terminations were handled.
Q.
A. Yes. Around âŹ1 billion is the conservative estimate. Thatâs based on likely claims by IBRC customers under the Deposit Guarantee and Eligible Liabilities schemes. But Nama also has to be reimbursed for taking on IBRCâs debts and if, when IBRCâs assets are sold off, there still isnât enough money to cover the debts, the shortfall will have to be made up by the State. Also, KPMG have been appointed liquidators, and they donât come cheap.
