Friday 23 February 2018

Fund could sue State over IBRC

Tom Lyons

A European hedge fund is considering taking a legal action against the dramatic decision by the State to place IBRC, formerly Anglo Irish Bank, into liquidation.

Assenagon Asset Investment, a multibillion fund based in Germany and Luxembourg, had successfully sued IBRC last year in England's high court after the bank tried to burn its €170m junior bond-holding. IBRC was in the process of appealing this decision to the supreme court in England.

The bank's special liquidator KPMG, however, told the courts in the last two weeks that it no longer planned to pursue this appeal as the bank was in liquidation. By the time this process is completed there will be nothing left for lower-ranked creditors like Assenagon.

The fund, however, is taking legal advice to reignite its claim against the State if it can prove the liquidation was illegal under ECB rules or simply a "contrived" insolvency designed to wipe out creditors.

The Department of Finance has denied this is the case. The former chief financial officer of Anglo Irish Bank, Maarten van Eden, however, has suggested the deal might be illegal if it is in breach of the ECB's "fundamental rule against monetary financing".

The Quinn family, who were also suing IBRC prior to its liquidation, are also looking at overturning the liquidation along with a number of other large creditors of the bank. Any legal action is likely to call on IBRC's board as well as senior civil servants in the department to explain exactly what happened.

Irish Independent

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