Tuesday 6 December 2016

High Court orders winding up of Rush Credit Union

Tim Healy

Published 21/11/2016 | 17:26

Rush Credit Union Photo: Mark Condren
Rush Credit Union Photo: Mark Condren

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

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It followed the appointment earlier 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 approximately 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 who had previously been 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 early 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 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 gardai have been notified of suspected money laundering.

In a statement, the Central Bank said credit union members received the €22.3m compensation payments since November 11 last.  

They represented 98 per cent of deposits covered by the guarantee scheme.

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

The court also heard that despite engagement and assistance from a number of bodies since 2010 to assist RCU with its difficulties, 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.

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