The Irish Government enacted the Irish Bank Resolution
Corporation Act 2013 (the "IBRC Act") in
the early hours of 7 February 2013 in order to secure and stabilise
the assets of the Irish Bank Resolution Corporation
("IBRC") (formerly known as Anglo Irish
IBRC Act: Purpose
The IBRC Act is designed to help address "the continuing
serious disturbance in the economy of the State" and to
"protect the interests of taxpayers". It provides
for the winding up of IBRC to bring to an end the financial
exposure of the State and the Irish Central Bank to IBRC. It
is stated that it is hoped that it will "help restore the
financial position of the State" and restore confidence in the
banking sector by "furthering the reorganisation of the Irish
The IBRC Act provides for the appointment by the Minister for
Finance of one or more special liquidators to wind up IBRC. Joint
special liquidators have now been appointed who have full custody
and power over all IBRC assets.
All borrowers' loans will initially be managed by the
special liquidators and all debts due to IBRC will remain due and
Loan Sales to Third Parties
Portfolios of assets including the mortgage book of IBRC will be
identified by the special liquidators who will oversee an
independent valuation and sales process of such assets to third
party bidders. The bidding process will be conducted in an
open and transparent manner. If acceptable bids equal to or in
excess of the independent valuation are obtained then they will be
sold to third parties. Otherwise, the relevant portfolio will be
sold into the National Asset Management Agency
("NAMA") at their valuation price.
The proceeds of these sales will be used to repay creditors in
accordance with normal Irish Companies Acts priorities, with
preferred creditors paid first, and then NAMA in respect of the
IBRC debt. To the extent that there are proceeds available
after repayment in full of the NAMA debt, these proceeds will be
applied to remaining unsecured creditors who have not been paid
under the guarantee schemes (the statutory Deposit Guarantee Scheme
which cover retail deposits up to €100,000 with all Irish
authorised credit institutions and the Eligible Liabilities
Guarantee which applies to deposits over €100,000 with certain
credit institutions including IBRC). These remaining unsecured
creditors will include the Minister for Finance to the extent that
he has paid out under the guarantee schemes. Similarly, if the
proceeds are not sufficient to pay IBRC's debt to NAMA, the
shortfall to NAMA will be met by the existing Ministerial guarantee
under the Credit Institutions (Financial Support) Act 2008. There
are also provisions in the IBRC Act enabling the varying of
priorities for certain creditors.
Special Liquidation Order: Effect
The Special Liquidation Order (the
"Order") made by the Minister for
for an immediate stay on all proceedings against IBRC;
that no further actions or proceedings can be issued against
IBRC without High Court consent;
that no action or proceedings for the winding up of IBRC, or
the appointment of a liquidator or an examiner can be taken,
issued, continued or commenced;
for the removal of any liquidator or examiner appointed prior
to the Order; and
that it constitutes notice of termination of employment for
each employee with immediate effect.
The appointment of a receiver pursuant to a debenture or charge
created by IBRC does not constitute proceedings for the purposes of
The special liquidators will have the same duties and powers as
a normal liquidator except that they are appointed by the Minister
for Finance and are obliged to comply with the instructions given
to them by the Minister for Finance and act in the interests of the
The Order shall for the purposes of any contract, deed or
agreement have the same effect as the making of a winding up by
court order or appointment of an official liquidator.
The Irish office of Maples and Calder has been advising
financial institutions, private equity firms and asset managers on
all aspects of Irish distressed real estate loan portfolio
Originally published 12 February 2013
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