Ireland

Lawyers for State-owned Irish Bank Resolution Corporation, formerly Anglo Irish Bank, pleaded for protection from a US bankruptcy court saying that the liquidated bank was a “very unique” case, the Irish Times reported. The Delaware bankruptcy court heard the bank’s case for Chapter 15 bankruptcy protection, guarding about €1 billion of US assets and blocking legal actions against it, at a hearing yesterday.

The management team at Irish retailer Arnotts is believed to have secured a backer willing to bid for the retailer’s loans with Irish Bank Resolution Corporation, which are up for sale, the Irish Times reported. It is unclear who the backer is but informed sources said it was a party “knowledgeable of retail”. Ulster Bank, which jointly controls Arnotts with IBRC, is understood to be supportive of this bid, although this could not be confirmed with the British lender last night.

Minister for Finance Michael Noonan will meet International Monetary Fund (IMF) officials in Washington this evening amid uncertainty over whether the Government will seek a precautionary credit line when it leaves the bailout programme in December, the Irish Times reported. With only seven weeks to go before Ireland’s official exit from the EU-IMF bailout, there is still no consensus in the troika or among European leaders about what sort of backstop might be provided to cushion Ireland’s return to the markets.

The Government faces demands from the troika to accept tough fiscal policy conditions in return for an emergency credit line to guard against any loss of market confidence in the wake of the bailout, the Irish Times reported. With only seven weeks to go before Ireland’s official exit from the EU-International Monetary Fund bailout, there is no consensus in the troika or among European leaders as to whether the Coalition should seek a precautionary loan programme.

Siac Construction, one of Ireland’s largest construction groups, is expected to seek the protection of the courts this week, possibly as early as today, as losses in Poland threaten the 100-year-old business, the IrishTimes reported. It is expected the application to the courts will be supported by the group’s main lenders, Bank of Ireland, KBC and Bank of Scotland Ireland. The Siac group has operations in Ireland, Britain, Belgium, Canada and Poland and has approximately 560 employees. Efforts to get a comment from the group last night were unsuccessful.

Aer Lingus has told the trustees of its staff pension scheme that it will not make an additional financial contribution to tackle a deficit of nearly €800 million, the Irish Times reported. Last summer the company told the markets a proposal put forward by the Labour Court that would have involved it investing about €140 million, could form the basis of an agreement for dealing with the estimated €780 million deficit in the Irish Airlines (General Employees) Superannuation Scheme (IASS). However, the Pensions Board subsequently raised concerns about the Labour Court proposal.

Minister for Finance Michael Noonan has insisted the door has not been shut on the State’s hopes of the ESM providing funds to directly recapitalise the Irish banks, the Irish Times reported. German finance minister Wolfgang Schäuble yesterday said retroactive direct recapitalisation for Ireland was “not probable” and he did not “see any necessity” for such a measure as Ireland was doing very well.

The wind down of Irish Bank Resolution Corporation is currently in full swing with the process of offering corporate loans for sale now under way. Most are being sold via portfolios but about 30 or 40 loans will be transacted on their own. Retailer Arnotts, broadcaster TV3 and fuel group Topaz are among those likely to be treated in this fashion, the reported. The alternative is to have the loans transferred to the National Asset Management Agency (Nama) and no business wants that.

Anglo Irish Bank and its successor Irish Bank Resolution Corporation overcharged customers by an estimated $1.6 billion (€1.2 billion) and continued to overcharge since the Government liquidated the bank in February, a forensic banking specialist has claimed in a US court, the Irish Times reported. The expert witness made the claim in a legal challenge taken against IBRC’s application for bankruptcy protection in a court in Delaware by developer John Flynn and related parties who claim they were overcharged $11 million on loans of about $200 million with the bank.

Ireland’s corporate tax regime and the Government’s claim for further bank aid from Europe has been sucked into talks on the formation of the next German government, the Irish Times reported. In discussions with German chancellor Angela Merkel, the opposition Social Democratic party has set its face against using the ESM permanent bailout fund to provide capital directly to Irish banks.