Members of insolvent credit union got €22m compo

The High Court has ordered the winding up of Rush Credit Union (RCU) in north Co Dublin.

It followed the appointment this month of provisional liquidators to the credit union which, the court heard, was insolvent.

The Central Bank, which applied for the winding up, said it had issued some €22.3m compensation payments through the deposit guarantee scheme to about 9,700 RCU members.

The President of the High Court, Mr Justice Peter Kelly, confirmed the appointment of Jim Luby and Tom Rogers of McStay Luby as joint liquidators. They were previously appointed on a provisional basis.

The judge ordered that a statement of affairs of the RCU be prepared and put the case in for the High Court Examiners List in January.

He also said there should be a continuation of his earlier order providing for the redaction of sensitive material in court documents which the Central Bank prepared in its application for the winding up.

The court heard previously that one of the reasons for the redactions was that criminal prosecutions may be brought arising out of investigations into RCU.

The investigations had revealed significant misappropriation of funds and gardaí have been notified of suspected money laundering.

In a statement, the Central Bank said that credit union members received the €22.3m compensation payments since November 11. They represented 98% of deposits covered by the guarantee scheme.

The court heard earlier this month that RCU’s net liabilities over assets was some €2m and it had minus 8.7% reserves which will require it to be funded to the tune of €4.73m. Credit unions are required to have at least 10% reserves of total assets.

The court also heard that despite engagement and assistance since 2010 to assist RCU, there had continued to be significant issues including in relation to internal governance, lending practices and there had also been a significant level of misappropriation of funds.

Serious deficiencies were found in relation to a number of matters, including control of bank and cash, lending practices, and day-to-day running of the credit union.