Michael Noonan, the force behind the liquidation of IBRC/Anglo Irish bank, evaluated the promissory note needed for the bank’s liquidation at €25 billion.
Mike Aynsley, former Chief Executive Officer and expert brought in to resolve the situation, estimated a higher amount of €28 billion.
So what will happen to the €3 billion excess not accounted for?
Unfortunately, it looks like the public will have to make up for the shortfall. Aynsley’s recent interviews with Irish press have illustrated that the bank was in fact solvent at the time of its liquidation, a fact that could lead to some very upset creditors dismissed in the act.
The potentially millions it might cost for the government to pay off the litigation from the creditors will have to come out of the public’s money, something that will almost certainly contribute to the introduction of a harsher budget.
The bank’s former Chief Financial Officer, Maarten Van Eden, has confirmed that this may be the case. “The liquidators may decide not to pay the creditors of Anglo [Irish Bank], but then they will be taken to court and the government will lose, because you cannot walk away from the liabilities of a solvent bank. Insolvency is the only reason for not paying your bills – even if you expropriate by law you will have to pay compensation,” he stated.
This is in direct contrast to the words of the man in charge of the liquidation, KPMG’s Kieran Wallace: “The bank was only solvent at the grace of the Central Bank of Ireland. It was not a solvent bank.”
However, the Department of Finance has seemingly countered this by saying that any difference found in the evaluation of the bank’s assets will have to be paid by the taxpaying public. A source stated the following: “The money will have to be found, yes.”
Creditors liable to bring suits against the government are firms such as Xaia Investments. The German-based company’s representative, Dr. Wolfgang Klopfer, responded to the situation by stating: “I expect a European government to act within the laws and once they act within the laws, there is no need to sue. I’m very confident that they will do it – and if they don’t do it, yes.”
The whole saga seems mired in confusion and the outlook for the public quite bleak, despite Aynsley’s efforts to save the bank from the very situation it finds itself in. To read more on the situation, please take a look at my Slide Share.