Mallow Credit Union to buy Charleville loans

Mallow Credit Union is poised to buy the loans due to defunct Charleville Credit Union following a court ruling on Friday.

The High Court appointed liquidators David O'Connor and Jim Hamilton of accountants BDO to Charleville Credit Union in Cork in November following an application by the Central Bank.

The court's president, Mr Justice Peter Kelly, approved proposals to sell Charleville's loans at a hearing on Friday.

Lawyers for the liquidators did not name the buyer, but it is understood to be Mallow Credit Union, which was considered a front-runner to buy the debts.

Mallow is also based in north Co Cork and extended its business to the Charleville area following the credit union’s closure. The move means it has the right to seek the repayment of Charleville’s loans from its borrowers.

‘Truly tested’

Seeking approval, Declan Murphy BL, for the liquidators, said the market had been "truly tested" with due diligence and the liquidators recommended acceptance of the sale as in the best interests of creditors.

Mr Justice Kelly said the evidence was the loan book consists of live and delinquent loans.

The Central Bank kept Charleville Credit Union under close regulatory supervision for years.

The lender had been unable to raise and keep its cash reserves at the required level of 10 per cent of assets, despite receiving an €8 million bailout from the Irish League of Credit Unions. Attempts to merge with other unions failed.

Since the appointment of provisional liquidators, the Deposit Guarantee Scheme, administered by the Central Bank, has issued compensation payments to about 10,900 members of Charleville Credit Union. The total compensation paid amounts to €39.2 million, representing more than 99 per cent of depositors covered by the scheme.