The Gazette 1976

GAZETTE

on behalf of the creditors only and his clients felt strongly that this could be the type of case in which there could be a conflict of interests to some degree between the interests of the Central Bank and the interests of the creditors. The purpose of the Central Bank Act and the system of licensing banks, was to protect the public in general but in a case like this it was the interests of the particular creditors which should concern the Court. There were three ways in which a winding up like this could be conducted. First of all there could be a winding up where there was an immediate realisation of all assets and a distribution of what was there, even if it were 50p in the £. There could also be a position that the Banks were holding securities which were not worth half of what they were worth when they were taken as securities, and if there was an immediate realisation, this might be very much against the interests of the creditors because it would not realise anything approaching a fair value. He thought it was probable that many Banks were sitting on securities deliberately in the hope that they would rise again. Third possibility — Winding-up under Companies Act There was a third possffiibility which happened in the case of the only other Bank which had been wound up by the Court in this country, the Irish Intercon- tinental Bank. The winding up proceedings in that case were under the Companies Act but what hap- pened was that as there was a reconstruction of the Bank, the winding up was never completed. Whe t her that was possible in this case, he did not know, because they had not seen the accounts; they did not know just how insolvent the Bank was, it was something which might be very much in the interests of the creditors that that happened. It certainly was, in the case of the Irish Intercontinental Bank, which was now a very successful bank. It was for this reason, that there were three possi- bilities, that the creditors were extremely anxious that a liquidator should be appointed who would go into the Irish Trust Bank with no preconceived ideas, nor prior knowledge of what had happened and that he should be a totally independent person. One of the problems of doing it under the Central Bank Act is that there is no provision for the creditors having any say whatsoever; no provision for a Com- mittee of Inspection which is something which Mr. Donnelly, whom we are proposing as liquidator, tells me is something he would prefer. Mr. McCracken said that if the position did turn out that it was possible to have some kind of recon- struction, he thought this would hardly come within the powers of the Official Assignee under the Central Bank Act. The Official Assignee's job was purely and simply to wind up the Bank, and he would be bound immediately to wind up the Bank, which might well be contrary to the interests of the creditors. There was also the fact that the Official Assignee would almost certainly have to do this with the assistance of outside accountants anyway. The real objection was that he would not have the discretion to act in what might be the interest of the creditors, nor would he be in a position to consult the creditors. It was pri- marily for this reason they were bringing this petition. Mr. McCracken said he understood that Mr. Lynch was going to apply to have Mr. Shortall appointed liquidator. His clients had an objection. Prior to these proceedings Mr. Shortall was engaged by the Central Bank to investigate the Irish Tr u st Bank. In a case

IRISH TRUST BANK— WINDING-UP PETITION

The procedure to be adopted in the winding up of the Irish Trust Bank Ltd., of Dawson Street, Dublin, and the appointment of the official liquidator, was announced by Mr. Justice Hamilton in the High Court in Dublin on March 23. The Central Bank has asked the Court to confirm to extend its order for the closure of the Irish Trust Bank to appoint the Official Assignee as liquidator as provided by the Central Bank Act. There was also before the Court a petition brought on behalf of Sean O Foghlu, Baily, Howth, Co. Dublin (a depositor) for the winding up of the bank under the Companies Act and for the appointment of Mr. Francis Donnelly of Haughey, Boland and Co., as official liquidator. Counsel for a number of other creditors supported this petition but put forward Mr. Patrick F. Shortall of Coopers and Lybrand Associates Ltd. for appoint- ment as official liquidator. At the end of yesterday's hearing, Mr. Justice Hamilton joined Mr. O Foghlu (representing all the depositors before the Court) as a defendant in the proceedings brought by the Central Bank. Mr. Brian McCracken, S.C., who said he was repre- senting creditors to the extent of £895,000 including Mr. O Foghlu, said that as far as the petition itself was concerned it was, he imagined, almost uncon- tested or incontestable in the sense that they were petitioning on two grounds, firstly that the company was insolvent and, secondly, that in any event, it was just and equitable that the company should be wound up. He said it appeared that the Central Bank had already proved to the Court that the company was insolvent. His clients, who were not a party to the Central Bank action, had no means of knowing, apart from the fact that the company had not honoured a formal demand by the petitioner for the repayment of a deposit which was repayable on demand. The real position was that the Bank ceased to carry on business and had been closed down by the Central Bank. That being so, it would appear just and equitable that the company should be wound up. Mr. McCracken said he did not think that Mr. Landy (for Irish Tr u st Bank Ltd.) was contesting this. He said that the real problem which arose in this case was what was the most suitable way in which to conduct the winding up of the Irish Trust Bank. Two proceeding before the Court The Court, he said, had two proceedings before it, one brought under the Central Bank Act by the Central Bank which sought to appoint the Official Asignee under the provisions of that Act, and the other by the petitioner who was a creditor, under which he sought to have the company wound up in the ordinary way by order of the Court. If the Court were to find that the best order to make was to wind up the company under order of the Court and not under the Central Bank Act, the question would arise as to who was going to be liquidator. Mr. McCracken said that his clients' concern was

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