Presbyterian savers with less than £20,000 miss out on payments
Published 12/02/2010 | 15:36
Presbyterian savers in the North suffered a fresh blow today after a judge ruled that those with less than £20,000 should not receive interim payments from the administrators.
Almost 10,000 people have been affected by the 2008 collapse of the Presbyterian Mutual Society (PMS), which did not qualify for Government support.
Belfast High Court judge Mr Justice Donal Deeny ruled that shareholder members of the society are not creditors and are not entitled to interim payouts from the administrators.
British Prime Minister Gordon Brown was today holding talks with First Minister Peter Robinson and Deputy First Minister Martin McGuinness about securing Government aid.
A spokeswoman for the Courts Service said: "Mr Justice Deeny sympathised with those shareholders who have found themselves in difficult circumstances but concluded that the shareholders of the PMS who did not withdraw their shares either before the PMS imposed a 21-day notice period in October 2008 or after the expiry of that notice period in mid-November cannot be creditors of the PMS in respect of those shares."
The court was told there are two types of investors in the society, shareholders with below £20,000 saved and loan capital holders with more than that who are creditors, the Courts Service representative added.
The largest investors are not necessarily individuals but include trusts and Presbyterian congregations.
The administrators have realised around £20m of assets which can only be distributed to creditors. Today's hearing was intended to provide a decision on who are creditors of the PMS.
According to the Courts Service, Mr Justice Deeny said there was a lack of definition of the term in the legislation but concluded that a shareholder would only become a creditor when he applied to the society to withdraw the shares, which many savers had not done at the time of the collapse.
The fate of the PMS was raised in the recent Hillsborough Castle talks between Northern Ireland politicians and the government.
Mr Robinson said: "Almost 10,000 people have been affected by the collapse of the Presbyterian Mutual Society, I am determined that their plight will not be forgotten.
"I and my Executive colleagues will continue to press the Prime Minister and the Treasury until a satisfactory solution to this problem is found."
Mr McGuinness said: "Many people have put their trust in the PMS and found themselves victims of circumstances way beyond their control.
"I believe there is a responsibility on Gordon Brown and the British Government to ensure that they do not incur losses to what for many are their life savings."
The Treasury Select Committee chaired by John McFall recently visited the Assembly in Belfast to hear from savers who said they had entrusted their money to the PMS because they felt reassured by its links to the Presbyterian Church.
Some told the committee they believed the PMS had over invested in the property market. When the international financial crisis sparked the institution's collapse, it did not qualify for the support offered by central government.
The MPs' report is due to be published soon.
The Ulster Unionist Party met Presbyterian moderator Stafford Carson and delegates today and raised the plight of savers.
Ulster Unionist leader Sir Reg Empey and deputy Danny Kennedy attended the meeting at Stormont.
Sir Reg said: "I believe it is now critical that there is full-scale Treasury involvement, with appropriate financial help to ensure that the Prime Minister's pledge that no saver in the United Kingdom would suffer as an effect of the economic downturn can be fully honoured.
"This has gone on for 16 months and people are in great distress.
"All other financial institutions have been rescued, including those who were behaving recklessly and endangering depositors' money.
"To date, neither director, auditor nor regulator has been asked to pay any price for their failure."