THERE HAS BEEN criticism of the Finance Minister after he confirmed yesterday that junior bondholders may be paid as part of the IBRC liquidation process – despite a suggestion on the night of the Promissory Note deal that this would be unlikely.
In the Dáil yesterday, Michael Noonan said that the junior bondholders at the former Anglo Irish Bank would be legally entitled to a dividend if they submitted a claim and it was found to be valid. However that would only happen if there was enough money left after all unsecured creditors – of which the Irish State makes up 70% – are paid first.
“Unsecured creditors will get paid if there is money, but there is a ranking order and it is not clear yet whether the €280 million worth of junior bondholders will pursue their claims as creditors, whether they can validate their claims as creditors, and, if so, if there will be any money left over when other unsecured creditors are paid,” he told TDs.
A spokesperson for the Minister’s department said today it should be noted that “as a result of outstanding litigation and other factors, it may take many years before the liquidator is in a position to determine that unsecured creditor will get paid”.
Sinn Féin’s finance spokesperson Pearse Doherty was outraged by the statement, pointing out that the banks that make up the IBRC cost the Irish people €35 billion.
The effects of that rescue are still being felt across the State. Now we are told that next year, as Water Charges start arriving, that bondholders may still be in line for a pay-out. That fact will not go unnoticed.
“The stain that is Anglo Irish and Irish Nationwide remains on our balance sheet while the bondholders are still likely to profit from the people’s suffering,” Doherty added. “The handling of the IBRC situation by Minister Noonan has made it likely, that seven years after Anglo collapsed, he will be the Minister that oversees yet more millions of the State’s money being handed over to bondholders.”
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