US Vulture Funds Linked To Billionaire Take On IBRC In $1 Billion Case

Two so-called vulture funds in the United States, which hold $75 million of subordinated bonds issued by the former Anglo Irish Bank, are threatening to scupper an attempt by the bank’s liquidators to protect $1 billion of its US assets from seizure by its creditors. The Irish Times understands that the funds, Burlington Alpha and Burlington Beta, are linked to Elliott Management, the giant hedge fund controlled by US billionaire Paul Singer. Mr Singer is one of the US Republican Party’s biggest contributors. One of his funds recently won a $1.3 billion subordinated bond case against the Argentine government over its sovereign default of a decade ago. Burlington’s lawyers declined to comment on the funds’ links to Mr Singer, while Mr Elliott did not respond to requests last night for comment. Kieran Wallace and Eamonn Richardson of KPMG, the special liquidators to Irish Bank Resolution Corporation (IBRC, formerly Anglo), have applied to a US bankruptcy court for Chapter 15 protection for its $1 billion of US assets. This would prevent bondholders and other creditors from seizing its US assets until the bank’s wind-down in Ireland has been completed. The Burlington funds have objected to the application on the basis that the liquidation “strips away” most of the protection normally afforded to creditors in an insolvency. IBRC is being liquidated outside the normal insolvency regime, under a law passed by the Dáil in an all-night session. Read more. (Subscription required.)