Court challenge to IL&P bailout
A FOUR-day hearing into the €2.7bn bailout of Irish Life & Permanent (IL&P) will begin today as a group of shareholders protest the massive dilution of their stake in the bancassurer. v
The shareholder grouping is to argue that it was unreasonable and unlawful for Finance Minister Michael Noonan to force the plc to accept a €2.7bn state handout and cede 99.8pc of the group's ownership to the State.
The shareholders will also challenge the reasonableness of the assumptions in 2011 banking stress tests, which imposed massive capital demands on IL&P to cover potential losses at its banking subsidiary Permanent TSB.
The Government is expected to vigorously defend the institution's bailout. The Department of Finance has also questioned the standing of the plaintiffs taking the case.
In October, the department asked the courts to dismiss a challenge by one plaintiff, Horizon Growth NV, on the basis that the fund was "not a member" [or shareholder] of Irish Life & Permanent. The department is also questioning the standing of another plaintiff, Piotr Skoczylas of Malta-based Scotchstone Capital.