independent

Sunday 20 April 2014

Credit union fights special managers bid for €646,000 payment

THE directors of Newbridge Credit Union are objecting to an application for €646,000 in fees being sought by the special manager appointed to the credit union and his lawyers.

If the fees are approved, the 37,000 members of the credit union will have paid more than €1.3m arising from the special manager's appointment by the Central Bank last year.

In the latest fee application, special manager Luke Charleton is seeking €563,000 for the costs of himself and his team and €83,000 in legal fees.

The board and supervisory committee of the credit union object to those fees Mr Justice Nicholas Kearns of the High Court (pictured) has heard.

Mr Charleton was appointed special manager last January under the Central Bank and Credit Institutions Resolution Act 2011 amid concerns about the credit union's financial position. His appointment was extended in July 2012, on consent of the directors, to mid January last. In December 2012, it was extended to next summer.

When agreeing in December to extend the appointment, Mr Justice Kearns, in response to the directors' concerns about what plan is being pursued for the credit union, asked Mr Charleton to deliver a report to court next April outlining what strategy is being pursued and what progress has been made.

The judge also asked Mr Charleton to consider various proposals advanced by the directors, including lowering the level of bad debt provisioning and extending time for repayment of loans.

He recognised the very difficult position of the directors in circumstances where Mr Charleton had taken over their functions and this was "not a situation that can drift on", the judge said.

The High Court previously approved €647,382 fees sought for five months work by Mr Charleton to June 2012.

The judge was told the sides had agreed the matter could be adjourned for hearing next week and he granted that adjournment.

Irish Independent

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