Monday 25 September 2017

Liquidators for IBRC sue Fingleton to get back €1m bonus

Michael Fingleton: action
Michael Fingleton: action

Dearbhail McDonald Legal Editor

FORMER Irish Nationwide managing director Michael Fingleton is facing civil action as a bank seeks the return of his €1m bonus.

The special liquidator of the IBRC has activated legal proceedings against several former directors of the building society.

Legal papers were served on Tuesday night by representatives of the IBRC on former board member Terence Cooney, former finance director and secretary Stan Purcell, and former chairman Michael Walsh.

Mr Fingleton and another former director, David Brophy, will also be served with papers by the special liquidators of the IBRC.

The IBRC is expected to seek the return of Mr Fingleton's controversial €1m bonus paid to him in the weeks after the government bank guarantee in 2008. Efforts to contact Mr Fingleton last night were unsuccessful.

It is understood the legal action relates to the directors' stewardship of the building society. It was nationalised in 2010 after receiving €5.4bn of state funds to cover losses on property lending.

Last year the IBRC issued 'protective' High Court legal proceedings against six former directors of the building society, but the case was not progressed at that time.

Former director Con Power was initially part of the lawsuit but is not part of the revived proceedings.

The IBRC filed a 'protective' plenary summons to the High Court on March 29, 2012, with the approval of Finance Minister Michael Noonan. This was to ensure its legal action would not be constrained by time limits under the statute of limitations, which sets the maximum time after an event that legal proceedings may be initiated.

Breached

Now the 2012 proceedings have been activated by the special liquidator of the IBRC, which is overseeing the wind-down of both Irish Nationwide and the former Anglo Irish Bank.

At the time the case was initially filed, the then-management of the IBRC said it was to pursue individuals believed to have breached various regulatory and contractual obligations.

It is understood the revived action relates to alleged breach of contract, breach of fiduciary and breach of duty of care.

The law passed to liquidate the IBRC has been dogged by controversy because it places an "immediate" stay on all existing legal actions against the bank, whilst allowing the bank to pursue any actions it wishes.

Under the IBRC Act 2013, future litigants are also barred from taking any fresh actions. But they will be allowed to sue the IBRC if they get permission from the courts.

Irish Independent

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