IBRC liquidation costs may reach €306m

The liquidation of Irish Bank Resolution Corporation (IBRC) is expected to cost up to €306 million by the time most of the wind-up work is completed at the end of 2022.

IBRC, which housed the remaining assets of Anglo Irish Bank and Irish Nationwide Building Society, was put into liquidation in February 2013 under a complex refinancing of the structure of the €34.7 billion bailout of both failed lenders.

"The joint special liquidators have indicated their expectation that the liquidation of IBRC should be substantially completed by the end of 2022 at a total estimated liquidation cost of between €291 million and €306 million," the Minister for Finance Paschal Donohoe said as the latest update on the liquidation was published on Thursday.

“However, it is important to note that this is subject to change depending on future events which are outside the control of the joint special liquidators.”

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Legal action

Late last year, debt campaigner David Hall initiated a legal action against Mr Donohoe for allegedly failing to have proper oversight over fees tied to IBRC's liquidation up until last February.

The latest update report shows that the KPMG special liquidators' team had received €144.9 million in fees in the 59 months to the end of December. A&L Goodbody tops the fees generated by law firms at €35.8 million. Linklaters has emerged as the third-highest paid firm, at €20.2 million.

All three figures are net of rebates agreed by the firms.

Meanwhile, the special liquidators estimate that their teams will receive between €38.5 million and €49 million of additional fees by the end of 2022, while other legal and professional advisers can expect to generate between €13 million and €18 million.

IBRC’s liquidators have so far paid out dividends equivalent to 50 per cent of senior unsecured claims that have been deemed valid. As a result, the State, which is IBRC’s main creditor, has received about €560 million.

Department of Finance officials said last December that total unsecured claims approved by the liquidators stood at €1.3 billion.

Final recovery

The liquidators said they expected to make a third dividend announcement by the end of this year and that they continued to estimate that unsecured creditors would receive between 75 per cent and 100 per cent of what they were owed.

The liquidators had €1.6 billion of cash as of February 6th. However, unsecured creditors’ final recovery depends largely on the outcome of an outstanding legal case between the family of businessman Seán Quinn and IBRC. The Quinns claim Anglo Irish lent them billions of euro illegally in 2008 to shore up their investment in the bank.