Indebted ex-Anglo bosses let bank tap their pensions
Former directors owing almost €180m open up their funds
Published 14/05/2010 | 05:00
Several former directors and executives of Anglo Irish, who collectively are believed to owe the bank almost €180m, have agreed to let Anglo use their pension funds to reduce their debts.
Occupational pension schemes are legally off-limits to Anglo Irish but some of those in debt have agreed to voluntarily reduce their pension entitlements from the bank and have offset these funds against their existing debts.
Some directors who have private self-administered pensions outside the bank have also agreed to arrangements to disburse funds from the schemes to reduce their indebtedness.
The bank yesterday was not able to comment on its approach to the issue.
Several former executives and directors have also lodged funds with the bank to at least meet their interest bills, while they work on longer-term plans to bring down the principal of the loan they have outstanding with the bank.
Several former directors are also using the courts to become what is known as an "arranged debtor'', which means they can strike a deal with their creditors during in-camera hearings.
Former directors of the bank have loans with a value of €155m outstanding, and the bank has been forced to take provisions for impairment of €108m on these, leaving €46m outstanding.
On top of these monies it is believed former executives, who were not directors, owe the bank about €22m, averaging about €2.7m each. Some of these former directors have loans of over €7m outstanding.
According to the Anglo Irish Bank annual report, covering 2009, former chairman Sean FitzPatrick owes €85.2m and €67m of provisions have been taken in regard to these amounts.
The provisions arise in "respect of failure or anticipated failure to repay''.
It is understood the main asset Mr FitzPatrick has is an oil well in Nigeria and the bank have already taken a charge on this and put a value on the asset believed to be around €80m. However this is the book value and there is no certainty the asset would sell for this price if it entered the open market.
The Irish Independent reported in April the bank was targeting the multi-million euro pensions of its former directors as it tried to recover €155m.
The pension pots of senior bankers are believed to be among the largest in the country -- for example, former Irish Nationwide chief executive Michael Fingleton had a pension scheme believed to contain €27m.
The lender unveiled a €12.7bn loss for the 15 months to the end of December, after writing down €15.1bn of toxic loans to developers.
Finance Minister Brian Lenihan agreed to pump €8.3bn into Anglo as a result, in order to fill a massive hole in its balance sheet.