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GAZETTE
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
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
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