Ex-Anglo UK chief fails in legal costs security bid
THE retired chief executive of Anglo Irish Bank's UK operation has failed to get security of legal costs orders against the bank’s successors over their action demanding he repay most of his €6m retirement package.
John Rowan, who left Anglo in late 2005, was a retiree "long out" before the matters recently revealed via taped recordings of conversations between various executives of the bank leading up to, and beyond, the State's September 2008 bank guarantee, his counsel Mark Connaughton SC told the Commercial Court.
Mr Connaughton said he wanted security for costs orders against Irish Bank Resolution Corporation (IBRC) Anglo's successors, because he was concerned about various aspects of an offer by IBRC special liquidator Kieran Wallace to provide €50m cash for legal costs. IBRC was hopelessly insolvent and was claiming this €50m was "absolutely ring-fenced" when it was not, he said.
His concerns included that the joint special liquidators of IBRC are subject to the control of the Minister for Finance, not the courts, counsel said. The "incredible" powers held by the Minister over the liquidators meant the situation concerning the €50m fund could change at any time should the Minister decide.
While the liquidators had offered to give notice of any such change, that could happen well into the litigation when considerable costs had already been incurred, Mr Connaughton said.
Cian Ferriter SC, for IBRC, said this security for costs application was legally and factually misconceived.
There was no basis for an order directing IBRC to provide security for costs when liquidator, Mr Wallace, "unequivocally" said on affidavit the €50m cash, which came from funds already realised in the liquidation, would be ring-fenced.
Mr Justice Peter Kelly ruled Mr Rowan had not met the onus of proof required to secure an order directing IBRC to provide security in circumstances including Mr Wallace's sworn statement €50m would be ring-fenced to meet any costs orders made against IBRC in the litigation.
In an affidavit previously, Mr Rowan said he was "horrified" repayment of his retirement package was being sought several years after his retirement in December 2005.
IBRC claims the purported “resignation agreement” Mr Rowan agreed with the then Anglo CEO Sean Fitzpatrick in December 2005 is void on grounds the relevant provisions of the Companies Act required the payments must be first approved by a general meeting of the bank.
It claims Mr Rowan must repay about €2.1m paid for loss of office, annual bonus for 2005 and outstanding deferred bonuses. It also wants repayment of another €2.89m for an employer pension contribution made to augment preserved benefits of about €1.5m payable to him at age 50.
Mr Rowan, Tinarana, Rahena Beg, Killaloe, Co Clare, began working with Anglo in Dublin in 1986 and in 1989 moved to London to work as managing director of its UK subsidiary. He was later appointed chief executive of the bank’s entire UK operations and by 2004 had salary and benefits worth more than €1.5m annually.
After Mr FitzPatrick announced he intended to step down as chief executive (and become chairman), Mr Rowan applied for Mr FitzPatrick’s job but it went to David Drumm. Mr Rowan said he realised he would “not be part of Mr Drumm’s future plans for the bank” and, having discussed the matter with Mr FitzPatrick, a retirement package was agreed which, inclusive of pension benefits, amounted to about €6m.