Taxpayer to foot bill for Anglo Irish lawsuits
Published 24/06/2010 | 05:00
THE taxpayer is facing an unlimited liability over more than 20 "legacy" lawsuits issued against Anglo Irish Bank.
State-owned Anglo is being sued in all the main markets in which it conducted business, including Ireland, the United Kingdom, Europe and the US.
The Department of Finance has admitted that the taxpayer, who is pumping some €22bn into the bank that will never be recovered, will also foot any legal bills and damages arising from successful civil lawsuits against the lender.
This is because no special indemnity clauses were contemplated, in either the 2008 banking guarantee or the recapitalisation programme, to ring fence the taxpayer from litigation liabilities.
Decisions on fighting the litigation will be taken by the bank on a case-by-case basis. The Irish Independent has learned that Anglo, whose board members are indemnified from lawsuits, has been receiving advice from the Office of the Attorney General
More than 50 High Court lawsuits have been lodged against Anglo, but the bank says that only 20 are related to "legacy" issues that are being investigated by five regulatory bodies, including the Garda Fraud Squad.
These include the secret share deal arranged by the bank to buy out part of businessman Sean Quinn's stake in the bank and Anglo's €7.45bn loan arrangement with Irish Life & Permanent (ILP).
The vast bulk of Irish claims has been initiated by small shareholders.
Anglo is being sued as a corporate entity and former directors, including former chairman Sean FitzPatrick and former CEO David Drumm, are being sued in a personal capacity.