There are two broad ways in which such a shareholder dispute may be handled – the consensual way and the non-consensual way. In theory, shareholder disputes should be the one type of dispute that should be amenable to Mediation, as usually the parties already know each other. I am pleased to say that, in practice, mediation does work well for shareholder disputes.

We are starting to see more shareholder disputes, as the Celtic Tiger roars back to life. During the economic crash, some shareholders had nothing to fight over, whereas now some companies have become very profitable.

We regularly use our mediation/negotiation skills to settle shareholder disputes and cases of oppression of minorities. In this regard we have had extensive experience of using our mediation/negotiation skills to settle cases brought under the old provisions of Section 205 of the 1963 Companies Act, or Section 212 of the 2014 Companies Act. Apart from using our mediation skills, we are able to bring our expert knowledge of company law, accounting, insolvency, share valuations, tax, fraud investigations, pensions and re-structuring to help negotiate a solution.

The key reason why a mediated type solutions works so well in a shareholder dispute is simply that a successful mediation can be a “Win:Win” solution for both sides, whereas a Court Ordered liquidation can generate massive losses for all involved.

There are many ways of settling a shareholder dispute, ranging from one shareholder agreeing to become a “sleeping partner”, issuing a different class of share, making use of tax exemptions on termination payments, a members voluntary liquidation, bringing in new shareholders to the classic solution of the company purchasing back shares.

I recall settling one shareholder dispute where the 2 founding shareholders wished to “move on” and could not decide on the value of the software that the company had spent 4 years developing. The company’s only asset was its “source code”.We agreed to place the company into a Members Voluntary Liquidation and to sell the software by “sealed tender” whereby both shareholders made “sealed” bids which were were then opened in front of both shareholders. I then distributed the net proceeds 50:50 between them. The opening of the sealed tenders would have been a great TV moment, as both parties were anxious to buy the software.

The Revenue Commissioners allow certain share buy backs to be treated as a capital type distribution provided the transaction “benefits the trade“. Revenue, who updated their guidance on the topic last week, will normally regard a share buy-back as benefiting the trade where for example:

  • There is a disagreement between the shareholders over the management of the company and that disagreement is having or is expected to have an adverse effect on the company’s trade and where the effect of the transaction is to remove the dissenting shareholder.
  • The purpose is to ensure that an unwilling shareholder who wishes to end his/her association with the company does not sell the shares to someone who might not be acceptable to the other shareholders.

Examples of this would include:

  • An outside shareholder who has provided equity finance and wishes to withdraw that finance.
  • A controlling shareholder who is retiring as a director and wishes to make way for new management.
  • Personal representatives of a deceased shareholder where they wish to realise the value of the shares.
  • A legatee of a deceased shareholder, where she/he does not wish to hold shares in the company.

The full updated Revenue guidance may be accessed here:

Shareholder disputes are very stressful for the shareholders involved. However, appointing an experienced firm of advisors who can set out a road map can help to both reduce the stress and the costs. Over the years we have developed a trusted panel of experienced solicitors and barristers who work with us on devising solutions.

If you have any clients who require advice on a shareholder dispute, please ask them to contact me, or Tom Murray or Andrew Hendrick.

I recall some years ago a senor banker said to me, very smugly, that “Our previous verbal agreements with your client are not worth the paper they are written on.”

Was the banker legally right in his statement? Yes, he was. The parol evidence rule prevents the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary the contractual terms of a written contract when the written contract is intended to be a complete and final expression of the parties’ agreement.

The Irish Courts have consistently applied the parol rule in the many cases that have come before it in recent years.

What prompted me to make this particular posting was a meeting with a client yesterday who had been told by his Relationship Manager that the bank “would deal with him fairly” once he had sold all of the properties that the bank had a charge on. My client was upset to find that after he had sold all of the properties, that the bank had refused very generous settlement offers (funded by a third party) and were now intent on obtaining judgment against him in respect of the residual debt, with a very aggressive firm of solicitors involved. Unfortunately, he is one of many clients who had been given similar assurances.

Our firm advice in any case involving re-structuring of bank debt is to insist on a written settlement agreement before disposing of any assets. In some cases, the best way to proceed is by way of using a Personal Insolvency Arrangement, particularly if the mortgage on the family home was either in arrears at 1 January 2015 or had been re-structured prior to that date, as Section 115A of the Personal Insolvency Act 2012 could be utilised to “cram down” the debt.

If any of your clients require advice on negotiating settlements with banks and/or vulture funds, please contact myself or Tom Murray

Last month AIB completed the sale of €1.1bn of loans from to Everyday Finance DAC for €800M, a discount on the loans of close to 25pc.

It’s understood most of the loans sold are attached to commercial property and investments after AIB stripped out buy-to-let mortgages, small-to-medium business loans, a number of development loans, and revolving facilities from its original planned sale of Project Redwood.

The borrowers’ loans will transfer to Everyday with effect from 27 July 2018.

Unfortunately, some of our clients who believed (and were led to believe!) that they were close to a final resolution of their debts with AIB have now been notified that their loans have been sold to Everyday i.e. they have been tumbled down the snake back to the very beginning, and now have to start negotiations from scratch again. To say that some of our clients are demoralised is an understatement.

If you have any clients who require expert advice on how to get back on the ladder and achieve a final resolution of their debts, please contact myself or Tom Murray  We are experts at navigating the complex interfaces of family homes, pensions, judgments, shareholdings, property receiverships, Personal Insolvency Arrangements etc

How to deal with compensation offers in respect of Tracker interest claims

We now know that more than 13,000 bank customers were incorrectly charged a wrong rate of interest on their tracker loans by the various banks. The Central bank reported in December 2017 that it had found “material deficiencies in certain lenders’ responses” which had required “robust and sustained” Central Bank intervention.

The banks, including Allied Irish Banks, Bank of Ireland, Ulster Bank, PTSB and KBC are still in the process of identifying affected customers and getting in touch with them. Some customers have already received offers of “redress and compensation”. The “Redress” payment is the amount calculated as being necessary to return the customer to the position they would have been in if the correct rate of interest had been applied. The “Compensation” payment is exactly that, it is compensation.

From the cases that we have seen it appears that the level of “compensation” being offered can vary from 5% to 30%  based on the interest overcharges.  The question is: Should customers accept such redress and compensation in full and final settlement?  Obviously, every case depends on its particular facts and circumstances.  We set out below some of the factors that should be considered when evaluating compensation offers.

Most customers at this stage have been notified of their entitlement to compensation.  However, we believe that some customers, particularly those customers who “switched” to another bank in advance of being notified by their existing bank that their interest rate was about to be increased, may not have been notified of their entitlement to compensation. We also believe that some customers who “switched” banks at the time may be unaware of how valuable their claims for compensation may be.  For example, a customer may have been charged the incorrect rate for, say, just 3 months in 2010 before they switched bank, and may have received a compensation cheque for just those 3 months.  The customer may not realise that he/she is now actually entitled to a tracker mortgage in 2018, and for 8 years compensation!

What was the correct “prevailing” rate?

In many cases the biggest issue is to determine if the bank is correct in deciding what interest rate should apply to a customer who came off a fixed rate. Some banks may argue that it should be “standard” variable rate, whereas in some cases it should be a tracker rate. Frankly speaking, the underlying documentation can be very ambiguous, and it may take some court cases to decide.

Statute of limitations

Technically the banks could have argued that some of the claims are statute barred.  However, as the banks are acknowledging, in writing, the claims then a new period of Statutory Limitations kicks in from the date of the written acknowledgement.

Domino Effect

In some cases the inflated interest charges triggered a loan default which enabled the bank to “call in” the loan and allowed the bank to appoint a Receiver. The losses caused by the “Domino” effect of a bank improperly appointing receivers to properties can be very substantial. In some cases, properties were sold by receivers into a market place where there was no liquidity and thus the properties achieved a low price, in comparison with the value that could be achieved today.

Health Effects

Some people will be able to make claims for stress induced illnesses such as depression, heart problems etc. In some cases, marriages fell apart due to the stress caused.  Such customers may be able to make successful claims for additional compensation in respect of medical bills and damage to health.

Damage to credit ratting

Some people may have found that their access to credit was cut off because of negative reports to the Irish Credit Bureau. This could lead to a claim for defamation, particularly if the customer was refused credit on the basis of an inaccurate credit report.

Costs of finance

Some customers might have been forced to use expensive forms of finance such as credit card debt or money lenders to buy groceries as the normal “household” monies were used to pay unjustified interest charges.

Is customer already adjudicated a bankrupt?

Some of the 13,000 customers who are being offered compensation may already have been adjudicated bankrupt.  If the customer had gone bankrupt because he felt that his situation was hopeless as a result of that particular bank overcharging him, then he may have a substantial claim for compensation.

If the customer is still in bankruptcy whilst the Redress/Compensation is due/received, then an allocation will need to be made between what amount is due for personal damages (pain & suffering) versus breach of contract.  Why is this allocation important? Because the Official Assignee cannot keep what compensation relating to personal injury claims, as such monies belong to the debtor personally.

Is customer going through a PIA?

If the customer had undergone a PIA because he felt that his situation was hopeless as a result of that particular bank overcharging him, then he may have a substantial claim for compensation.

If he is currently going through a PIA with multiple creditors, then any compensation payments may be captured by the “windfall” provisions of the PIA, and thus there may be little motivation for the customer to appeal any settlement offer.

It is possible that some existing PIA’s might require a “Variation”

Can the settlement offer be used to do a PIA/DSA?

Some people have been unable to do a PIA/DSA to date because they had no surplus to offer their creditors after allowing for Reasonable living Expenses. A lumps sum settlement may enable some people to do a PIA/DSA settling all creditors.

Loss of family home

In a limited number of cases people will have lost their family homes as a direct result of being charged incorrect interest rates. Such customers should be entitled to high compensation.

In threat of losing family home?

Some customers may have had such large mortgage difficulties that even if they had retained their tracker rates they may still face the risk of their house being re-possessed.  In such cases we have seen banks just offering to set off the redress and compensation payment against the existing mortgage.  It could be argued that such customers should reject the settlement offer, and thereby make it more difficult for the bank to obtain a re-possession order. Any delays in a re-possession order would give the family time to improve their financial circumstances and possibly do a Personal Insolvency Arrangement.

Should customers avail of the Appeal procedures?

Banks are presently computing redress and compensation payments on a mathematical basis without consulting customers.  Accordingly, banks may be unaware of customers having to resort to expensive finance to meet interest payments or may be unware of medical bills incurred etc.  Accordingly, we believe that most customers should avail of the Appeal procedures to enable the bank to assess such new information.  Like any adjudication process, the best results are obtained with professional advice.

However, those customers with substantial claims might be advised to immediately instruct solicitors to issue a 7 day “Demand” letter and then follow up with legal proceedings. Such an approach can put more pressure on a bank to make a more “reasonable” settlement offer; otherwise they could end up paying both sets of legal costs.

Consequential Losses

Customers may have a “direct” loss attributable to the breach of contract and may also have an “indirect” loss e.g. being unable to finance another investment property. “Indirect” losses are more difficult to calculate and require specialist legal advice.

On-going stress of making appeals

Some people will just want to accept the compensation offered and move on with their lives.  Those who decide to appeal, or to issue legal proceedings, may face ongoing stress until the matter is finally resolved.

Becoming personally liable for legal costs

Those customers who take the decision to take legal action could become liable for both their own legal costs and the bank’s legal costs if they lose.

The banks are very well resourced and will, in our opinion heavily defend any initial legal actions to avoid any legal precedent being set.

In order to be successful in any such legal action it is likely that the customer will need to retain a forensic accountant.  In some cases, for example, the accountant might have to calculate the costs of medical bills incurred as a result of the stress caused, and in preparing such calculations he would have to consider whether the customer obtained tax relief on the medical bills etc.

What information do we need to advise you as to whether you should accept the offer of compensation?

In order to have a full proper assessment of your claim,  we need to consider all of your financial circumstances. In order to do this we would email you an “Interview” form for you to complete in advance of meeting with us. For further information please contact one of us by email on:

Please note that we charge a fee of €300 (inclusive of VAT) for the initial consultation at which time we will outline the various options open to you. If we believe legal proceedings are necessary then we can recommend experienced firms of solicitors to progress your claim for redress and compensation in respect of tracker mortgages.

We are now starting to see more debt recovery cases being successfully challenged on the basis of the Statute of Limitations.

In a Court of Appeal judgment delivered on 6th December 2017, the Court was asked to decide on the issue of a PG being “Signed Sealed and Delivered”

The Defendant argued that the PG bore no seal, and was therefore a document in reality that was not under seal. The significance of this issue is that if the document is an instrument executed under seal a limitation period for the commencement of these proceedings of twelve years applies and they are not statute barred. On the other hand, if it is a document not executed under seal, a limitation period of six years applies, and arguably the proceedings could be statute barred.

In the appeal the defendant argued that the issue of whether the absence of an actual seal on the guarantee and indemnity document, combined with the his averment that he did not seal the document when executing the document, renders it an instrument not executed under seal.

The issue raised  is something which has not as yet been the subject of a judgment in this jurisdiction.

The court directed that the matter be adjourned to plenary hearing, and its outcome will have a significant bearing on many other similar cases.

I set out below a link to the judgment:

ACC Loan Management DAC -v- O’Toole

If you have clients facing calls on personal guarantees or have other debt issues we would be delighted to meet with them and outline their options.

One of the popular ways for banks to deal with mortgages in difficulty is to “warehouse” some of the mortgage and agree with the borrowers that they may pay what they can afford to pay at the time, and pay off the warehoused amount at the end of the extended mortgage term.

The vexed question of warehousing frequently came up in Personal Insolvency Arrangements, with some banks insisting on warehousing if they were to approve a PIA.

Warehousing poses a dilemma for Personal Insolvency Practitioners, as PIPs are required to restore the Debtors to solvency. How could a PIP say that a debtor was restored to solvency if he had a large “warehouse” amount to pay at the end of the mortgage, particularly if the debtor was over, say, the age of 65 at the end of the mortgage.?

In view of the above dilemma, it was only a matter of time before the High Court provided a ruling on the matter. Such a ruling was given on 22 May 2017 in a case involving KBC bank.

The core facts of the case were that KBC were owed €285,000 on a family home with a value of €105,000.  The PIA provided that the mortgage be written down to €120,000, with the balance written off.  KBC objected, and stated that its counter-offer of writing off €15,000 and splitting the mortgage into two components: a “live mortgage” of €135,000 and a “warehoused” mortgage of €135,000 bearing interest at 0% should have been incorporated into the proposal.

The court held that there was nothing in the legislation which prohibits the splitting of a mortgage. The court also held that any individual case will “depend on all the circumstances.”

The court concluded, based on the particular circumstances, that the PIA as formulated by the PIP was not unfairly prejudicial to KBC, and affirmed the Circuit Court Order approving the PIA.

Impact of judgment

The judgment confirms that a well thought and reasoned PIA will be difficult for a creditor to object to. It confirms that the PIP has a “reasonable” degree of latitude in formulating PIAs. It also significantly blunts the main tool of mortgage providers, warehousing, going forward.

I will be presenting a talk next Wednesday morning, 24th May, at Chartered Accountants House, Dublin 2 on Corporate Recovery Strategies. Given that most receivership appointments are currently being made by the vulture funds, I will have a module on how to reach settlements with the vulture funds.

I will also address briefly how the new personal insolvency legislation can help navigate any fall out from Personal Guarantees etc.

I have invited a guest speaker, Ronan McGoldrick of Leman Solicitors, to outline the legal perspective on dealing with the vulture funds. Ronan has considerable experience in dealing with vulture funds, and identifying key negotiating points.

Vulture funds do not generally receive good press. However, when it comes to doing deals, we prefer to deal with vulture funds as they have no moral hang ups about debt forgiveness, they act commercially and they give fast decisions.

I set out below an example of a deal that we recently agreed with a vulture fund, which illustrates their commerciality and decisiveness.

The core facts were that a debtor owed €443,000 to a bank and €8.3 million to the fund. Both debts were unsecured, meaning that the debtor was eligible to do a Debt Settlement Agreement (“DSA”). The debtor’s only substantive asset was a 50% share in the unencumbered family home with a value of €900,000. The debtor had monthly income of €3,111 over and above his Reasonable Living Expenses. A key fact was that the bank was just about to obtain judgment in the High Court, and proceed to register a judgment mortgage against the debtor’s interest in the family home. Whilst the fund had served legal demands on the debtor in respect of the debt of €8.3 million, it had not yet issued proceedings.

The debtor approached us for advice. When we heard that the bank were about to obtain judgement we called the vulture fund and made the following case;

  • If the bank registered their judgment of €443,000 on the debtor’s interest in the family home, they would be no equity remaining for the vulture fund.
  • The debtor’s spouse had limited savings of her own, but she was prepared to use up to €80,000 of those savings to try and do a deal.
  • Doing a deal now would save the fund substantial legal fees in obtaining judgment etc.
  • We said that if the vulture fund agreed to vote in favour of a DSA, that the DSA would pay a dividend of €54,500 to them.

Within 2 days the agents and solicitors for vulture fund evaluated the proposal and agreed to support it.

We then prepared a DSA. The key objective, given that the fund had committed to accepting a dividend of €54,500, in the DSA was to ensure that the bank was not “unfairly prejudiced” by the DSA. If the bank could demonstrate to the High Court that they were unfairly prejudiced, then the DSA would not be approved. We prepared a “Statement of Estimated Outcome” comparing the proposed DSA with the expected outcome in a bankruptcy.  See Statement below.

                                                                           DSA                              Bankruptcy

                                                                          Outcome                        Outcome

50% share of house                                              –                                     405,000

Other Assets                                                      9,882                                    9,882

Income Payments Order                                     –                                       112,012

Contribution from spouse                                 78,065                                     –

Gross Realisations                                          87,947                               526,894

Less Costs                                                         (6,150)                             (89,236)

Net Realisations                                              81,797                              437,658


Payable to bank on claim of €443,891            27,297                                22,297

Payable to fund  on claim of €8,261,532         54,500                               415,361 

81,797                                437,658

We proceeded with the DSA.  The bank voted no against the proposal but the fund voted in favour.  As the DSA only needed a 65% vote to get it over the line, the fund’s vote of 95% was overwhelming. The DSA was subsequently approved by the High Court.

Obviously, what helped in this case was that we were presented with a perfect storm” i.e. the pending registration of the judgment mortgage, which would have meant that there would be virtually no assets left for the vulture fund. Thus the vulture fund acted commercially and decisively, and obtained a dividend of €54,500.

If you have any clients facing a registration of a judgment mortgage against their family homes, and if they have other creditors, they should immediately contact a Personal Insolvency Practitioner to determine what settlement options might be navigated. As can be seen from the above, a pending judgment from one creditor can actually create a “perfect storm” that would allow a PIP to navigate a very cost effective solution.

(The debtor provided his permission to share the above case.)

Some of the country’s best credit managers were left reeling last week following the sudden liquidation of Precision Electric (Ireland) Limited (“the Company”).

The last audited accounts filed for the company for the year ended 31 July 2015 showed net assets of €3.3 million. Given that the Company had traded successfully for some 48 years and had such a strong balance sheet the sudden liquidation shocked many creditors and their professional advisors.

One major creditor, who was owed over €200,000 and who had traded with the Company for decades told the creditors meeting that he would have supported a recovery plan but was not consulted about the Company’s difficulties. Many other creditors echoed similar sentiments. Given that just 10 creditors represented 50% of the unsecured creditors of €3.2 million, obtaining approval for an Examinership could have been straightforward.

It was a creditors meeting that left many creditors and their professional advisors (myself included) frustrated with the lack of information provided by the chairman.

Given that the Company was a sub contractor in the construction industry, much of its work in progress will, in my view, not be collectible in a liquidation..

A successful recovery plan or Examinership could also have saved the taxpayer €987,000 in employees wages and redundancy claims.

It appears that the Company’s directors did not fully appreciate the support that they would have received from creditors for either an orderly wind down or an Examinership. The lesson to be learnt is that creditors will generally be supportive of a recovery plan, as opposed to a liquidation that will destroy the value of assets, and that such recovery plans should be considered before taking the terminal decision to place a company into liquidation.

Having said the above, chairing a creditors meeting is a very stressful, and perhaps the Chairman was simply unable to properly explain the reasons why the Company had to go into liquidation.

Brexit is going to happen. There will be winners and losers. Even though your business might be the “best in its class” with the best management team, best technology etc, it may simply be on the wrong side of the equation when Brexit happens, and no amount of re-structuring or business planning is going to change that equation.

Most businesses that will be affected by Brexit have started work on Plan A, i.e. preparing business plans to deal with Brexit. Some of these plans will work. However, some plans will simply not be financially viable. It is rare that we see a pessimistic business plan!

Some banks, such as Bank of Ireland, will now ask to see customer’s business plans for dealing with Brexit.

Whilst Plan A will work for some businesses, certain businesses should consider Plan B, i.e. either selling the business now, or totally existing the existing business sector and migrating to a new sector.

I recall advising an industrious sub-contractor to the construction sector in early 2008. He had built up a valuable company, but he was concerned about the “construction bubble“. He was determined to cash in his business before he became caught for bad debts. His biggest concern was that if he advised his customers, the Main Contractors, that he was exiting the business that they would not pay him for work being completed. We quickly concluded that he could not sell his business, given the nature of it, and that the best option was an orderly wind down. We devised a simple strategy: He added an extra 20% to his “normal” tender prices for new work, which meant that he did not win any new work. Within 6 months he had completed all contracts, collected all of his debtors, paid off all creditors and we then placed the company into a Members Voluntary Liquidation. He received over €1 million in cash. If he had stayed in the business he would have lost everything.

It is rare that we are given such advance notice of what will be a financial calamity for certain buisnesses. Time is now of the essence.

Whilst we are advising clients on Plan A, we are certainly keeping Option B on the table. In advising Clients on Plan A, we are encouraging them to avail of the €5,000 grant available from Enterprise Ireland for Brexit Planning: see

If you have clients that are concerned about Brexit, they may contact me or my partner to arrange a meeting to discuss options.

The Courts Act 1981 (Interest on Judgment Debts) Order 2016 (SI No 624 of 2016) came into operation on 1 January 2017. The effect of the Order is to reduce the rate of interest payable on judgment debts from 8% to 2%. The 8% rate had applied since January 1989.
In many cases the rate of interest on judgments was academic, as many debtors were only able to pay a fraction of the actual judgment in any event.  However, for some debtors it will be very welcome news.
I have no doubt that some people will now decide to stop paying creditors who are charging very high rates of interest, and oblige their creditors to consider obtaining judgment where they will only get 2% interest.  Some debtors might use the change to re-negotiate the interest rate on loans etc. Obviously, such debtors would have their credit rating damaged if a judgment was made against them, but their credit rating might have already have been damaged.
I think the 2% rate is too low.  The cost of funding for some creditors would be substantially higher, and thus they may stand to lose money on certain types of business.

Traditionally we have always received the most calls in the month of January from accountants and solicitors asking how their clients should deal with creditor pressure.  This January is proving no different. What is significant about January is that there is usually more creditor pressure from the tax authorities as a result of the VAT liability for November/December becoming payable combined with the balancing PAYE/PRSI/USC liabilities for the year end P35. The hospitality and retail sectors are particularly affected due to low sales in January.

Types of Sheriffs

Trade creditors can obtain judgment and use a sheriff to enforce.The execution procedure is carried out in Dublin and Cork by “private sector” Sheriffs and in other counties by County Registrars.  The Revenue are empowered to confer Sheriff’s power on their own appointees, and they have appointed 16 sheriffs around the country. A major advantage of the sheriff system as far as the Revenue is concerned is that unpaid taxes can be collected by a Revenue Sheriff without the need for judgement being given against the tax payer.

What can be seized?

The Sheriff may seize any goods, chattels, growing crops and any money, bank notes, cheques, bills of exchange, promissory notes, bonds or securities for money belonging to the debtor.

The Sheriff cannot take property belonging to third parties, such as property acquired under hire purchase. Stock which is subject to Reservation of Title claims is a more complex area.

Under Sections 606 and 607 of the 2014 Companies Act (“the Act”), the Sheriff must, after the sale, hold the proceeds for 14 days to allow for notice of a winding up of the company to be served on him. If such notice is served within that time, he must, after the deduction of his costs, pay the balance to the liquidator, who is entitled to retain it as against the execution creditor. If, however, the Sheriff receives notice of the winding up before the sale or the completion of the execution by the receipt or the recovery of the full amount of the levy, he must deliver the goods or any money received to the liquidator without deducting the costs of execution.

How to deal with the Sheriff?

Obviously, it is better to reach arrangements with creditors before sheriffs are instructed so as to avoid the “poundage” costs of the sheriff.

Before the Sheriff makes a visit, it is normal for him to contact the debtor by letter requesting his proposals for payment. The receipt of such a letter is a significant event for the directors of a company, as it is evidence that the company is unable to pay its debts as they fall due. The directors need to consider very carefully if they should continue to trade, as it is possible that they be held personally liable for any new debts incurred by the company.

At this stage the directors, and its business advisors, should consider whether the company is insolvent, and if so should cease trading to avoid the directors being made personally liable for reckless trading. If the company is insolvent and has no prospect of its fortunes reviving then the directors should take immediate steps to place the company into liquidation. A copy of the notice to creditors convening the creditors meeting pursuant to section 587 of the 2014 Companies Act should be sent at the earliest opportunity to the Sheriff. Provided the Sheriff receives this notification within the appropriate time frame then the  creditor, pursuant to  the Act, is not entitled to retain the benefit of any execution. The purpose of the Act is to prevent any one creditor being preferred over another. Another alternative open to the debtor is to invite the bank to appoint a Receiver if the bank has the appropriate debenture.

If the directors considers that the business is viable, but is just suffering from short term cash flow difficulties, then they should open up dialogue with the Sheriff and present positive proposals for settling the debt. If no such proposals are forthcoming, then the Sheriff will visit the premises to seize whatever assets he can.

The Revenue sheriffs are “private sector” self employed individuals. As a result, they can be very pragmatic: It does not pay them to become involved in complex seizures of assets.  The sheriffs have been given authority by the Revenue to negotiate instalment plans of up to 2 years.

The directors should also consider the possibility of examinership.

For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or or

I set out below a chart that shows the number of High Court Summary Summons issued by the major banks and vulture funds in 2010 and the projected number for 2016.

2010                         2016

ACC                                                          266                             80

AIB/EBS                                                    716                        1,140

BOI/ICS                                                  1,314                           520

Bank of Scotland                                        124                              0

Cabot                                                            34                           130

Anglo Irish Bank                                            48                              0

Danske                                                          46                           120

PTSB                                                             33                              2

KBC                                                                  5                             30

NAMA                                                               6                               6

Start Mortgages                                              10                             20

Ulster Bank                                                    306                             10

Vulture Funds                                                    6                              76

Totals                                                         2,914                         2,134

Our firm researched the web site of the Courts Service,, to identify the number of Summary Summons issued.  (A Summary Summons is issued by a plaintiff in the hope of obtaining a “summary” or “quick” judgment.)

Whilst the two years chosen, 2010 and 2016, are not directly comparable, as the jurisdiction limit for High Court cases was raised from €38,092 to €75,000 on 3 February 2014, the chart does show some trends.  Our figures for 2016 are based on the number of summons issued up to 15 November 2016, and then extrapolated to the end of the year.

The above chart reflects the changes that have been on going in the Irish Banking Sector since 2010, with ACC, Anglo, Bank of Scotland and Danske exiting the market place, and also reflects significant loan sales by other banks.

The litigation activity of three banks, ACC, Bank of Ireland and Ulster Bank reduced significantly since 2010.  ACC and Bank of Ireland were, relatively speaking, first out of the blocks in relation to other banks.  Ulster Bank sold the majority of its problem loans to vulture funds and thus is now less active.  AIB are now more active, and are getting tougher in their approach.

Whilst thousands of “informal” deals have been achieved to date, there are still thousands of cases to be resolved. Unfortunately, we are starting to see some previous settlements becoming unravelled for a combination of factors, including unrealistic targets being originally set and the impact of Brexit on certain sectors of the economy. Many more deals will become unravelled if interest rates increase significantly.

The most dramatic change that is taking place is the increasing dominance of the vulture funds.  Given that the vulture funds have purchased over €70 billion of Irish debt, it is not surprising to see them changing the litigation landscape. The vulture funds have been working their way through the loan books, and are now starting to issue proceedings on the more difficult cases. Having said, we do find the vulture funds to be much more pragmatic than the mainstream banks when it comes to debt forgiveness. Vulture funds are reluctant to incur substantial legal costs if a negotiated solution can be achieved. Some banks have a policy of obtaining judgment regardless. Experience has shown that it is easy to obtain judgment, but that the real skill is actually getting paid.

Whilst vulture funds can be slow to issue legal proceedings, they are much faster when it comes to appointing receivers.  I would estimate that over 50% of all receivership appointments are currently being made by the vulture funds.

What we find surprising is the number of people in financial distress who have yet to recognise the benefits of Personal Insolvency Arrangements and Debt Settlement Arrangements. It seems that few people realise that a Judgment Mortgage can be lifted provided a Protective Certificate is obtained within 3 months of the registration date, and that some of the equity could be used to do a deal with all creditors.

I set out below the different ways that people are dealing with their debt issues.

Ignoring it

For certain people, this can be an effective way of dealing with debt, provided the debt is not on a family home.

One lesson I have learnt over the years is that it is easy to obtain judgment: The difficulty is trying to collect it. The difficulty is illustrated by one litigation solicitor acting for one of the major banks who recently told me that he has over one hundred judgments that his firm had obtained for one bank, but which the bank had yet to receive a single cent from any of them.

Some debtors are living with substantial judgments against themselves by “living a second life”, which involves their “businesses” being controlled by a spouse or by children who just pay them enough monies to live on. Such businesses are beyond the reach of creditors, and such arrangements can constitute very effective Capital Acquisitions Tax planning at the same time.

Informal Arrangements

This is by far the most common way of dealing with debt.  Many banks are now prepared to do informal deals. However, there are some banks who will only provide debt forgiveness via a PIA/DSA.

Personal Insolvency Arrangements

PIA’s are a great way to deal with multiple creditors, particularly if the mortgage on the family home was in arrears as at 1 January 2015, as debtors can use the “No Veto” provisions of Section 115A.

Debt Settlement Arrangements

Like PIAs, DSAs are a great way to deal with multiple creditors.


Bankruptcy is the ultimate way of dealing with unsustainable debt.  In some cases, debtors can go bankrupt and still retain their family home.

Personal Insolvency Conference

Chartered Accountants Ireland are holding a Personal Insolvency Conference on 30th November 2016 at Chartered Accountants House.  The cost to attend is €90, and attendance is not limited to chartered accountants.  I set out below the link to the on-line booking site for the conference.:


I set out below the  speakers and content for the Conference, which will discuss in greater depth the various ways that debtors may address their debts.

Jim Stafford, Friel Stafford :   Latest Developments in Personal Insolvency

    • How to deal with vulture funds
    • How to lift the banks’ veto  in Personal Insolvency Arrangements (Section 115A)
    • Latest update on case law
    •  When and how to use the Data Protection Acts

Chris Lehane, Official Assignee

  • What happens the family home in a bankruptcy?
  • How are income payment orders calculated?
  • How are pensions dealt with in a bankruptcy? 

David Hall, Irish Mortgage Holders Organisation  

  • Apart from PIA’s, what other options are open to borrowers who wish to keep their PPR?

Ross Maguire, Senior Counsel,  New Beginning  

  • What asset protection steps may a debtor in financial difficulties take?







Unfortunately, the reach of the Leprechaun’s spell goes beyond the production of misleading Central Statistics Office figures and it appears to extend into other areas of Government.

Leprechauns, who are well known for their sense of mischief, appear to have muddled the Government’s approach to advising the thousands of debtors who are in financial distress. Obviously, it is a perfect area for Leprechauns to meddle in, as they can never go bankrupt themselves given their crocks of gold!

Whilst the Government has produced the most effective legislation in Europe for assisting home owners to retain their family homes with negative equity under the regime regulated by the Insolvency Service of Ireland (“ISI”), the Government has confused debtors by authorising two different sets of “professional advisors”, with different “product offerings”.

Debtors may approach either a Personal Insolvency Practitioner (“PIP”), regulated by the ISI or a Debt Management Firm, regulated by the Central Bank of Ireland. Obviously, any debtor seeing that a Debt Management Firm is regulated by the Central Bank would take great comfort from such regulation, and would be entitled to assume that they are obtaining the best possible advice. However, very few Debt Management firms are able to carry out a Personal Insolvency Arrangement (“PIA”) or a Debt Settlement Arrangement (“DSA”) as they do not employ any PIPs. I am aware of several Debt Management  Firms  that do have PIPs but who have totally avoided doing PIAs/DSAs due to their cost and complexity. Accordingly, there must be a concern that such firms will attempt to do an informal arrangement, whilst a PIA or DSA might be better.

So is the solution for the debtor to see a PIP? This is where it gets even more confusing. Whilst all PIPs are authorised to do PIAs and DSAs, not all PIPs are authorised to do informal schemes, as they have not been authorised by the Central Bank or any other regulatory body. If a debtor goes to see a PIP who is not authorised to negotiate an informal scheme, then he will be steered down the PIA/DSA route, which could be more expensive and stressful for the debtor, and indeed may not work at all.

So, which firms are best placed to advise debtors on the full range of options? Obviously, it is those firms whose advisors are both authorised to do informal schemes and are registered PIPs. However, there is no central register of such firms. The ISI do not identify on their website which PIPs are authorised to formulate informal schemes, and the Central Bank do not identify on their web site which Debt Management firms have Personal Insolvency Practitioners.

Whilst the ISI actively promote PIAs and DSAs, there is a significant role for informal schemes. One of the key reasons why banks are more receptive to informal schemes is that in many cases there is now a realistic possibility of a “no veto” PIA being implemented, and the banks are keen to avoid expensive and cumbersome PIAs/DSAs.

The obvious solution is that there should only be one regulator of professional advisors providing services to distressed debtors, and that regulator should be the ISI. Having just one regulator would avoid the necessity of some PIPs having to apply to the Central Bank for authorisation. Debt Management Firms do have a very useful role to play in advising the thousands of distressed borrowers.

The ISI has recently announced a new scheme which will allow debtors to obtain advice from a PIP free of charge. Unfortunately, for the PIPs to sign up to the scheme they have to undertake to comply with the scheme’s rules, which effectively oblige the PIP to take the debtor down a PIA/DSA route as opposed to an informal route. Our firm has decided that we are unable to participate in that scheme, as our participation would have compromised our ability to provide independent and objective advice to a debtor. When debtors initially approach us for advice, we quickly determine if we will act as a PIP or as a professional advisor with a view to agreeing an informal scheme.. The reality is that we have been able to negotiate many informal deals at less cost and stress to the debtor than a PIA/DSA. Unfortunately, the terms and conditions that ISI has laid down for the new scheme effectively force PIPs to take debtors down a PIA/DSA route, even though an informal arrangement might be less costly and less stressful to the debtor. Being forced to take debtors down a PIA/DSA route may simply not be the best option for a debtor.

Both the ISI and the Money Advice Budgeting Service promote the portal site The portal site will now only mention those PIPs who have signed up to the new ISI “free advice” scheme, and will not list those PIPs who have not signed up. Those debtors who use that portal site will not realise that by using those particular PIPs listed, that there is a real danger that they will not be advised about possible informal options, which can be less stressful and costly.

Our own website used to refer clients to as a source of useful information but we have now deleted that link as we do not  believe the guidance it provides is the “best” guidance.  The site should recommend distressed debtors to see PIPs who can provide advice on PIAs/DSAs and informal schemes, and not funnel them towards PIPs that can only provide PIAs/DSAs.

Not only has the Government confused debtors by creating two different sets of “professional advisors”, with different “product offerings”, it has also reduced the effectiveness of the PIAs by effectively excluding debtors with more than €3m of “secured” debt. There are many debtors up and down the country who have been unable to do a PIA because their secured debts exceed €3m. Many of these debtors have had to go bankrupt as a result in order to get on with their lives.

In conclusion, it is time for the Government to lift the Leprechaun’s spell, and appoint a single Regulator, the ISI, to regulate all debt advisors.   In this way the Government can take a co-ordinated approach to ensuring that distressed debtors receive the best possible advice. It is also time for the Government to lift the €3m cap on PIAs.

Given that no legislation can be amended until the Autumn, the ISI should update its website to clearly show which PIPs provide a “PIP only” service, and those PIPs who can provide a PIP service and advice on informal schemes.

The ISI should also start publishing statistics on the number of successful “informal” schemes that PIPs implement.

A shorter version of the above article was originally published in the Sunday Business Post on 31st July 2016.

I set out below an article by Mary Carolan in today’s Irish Times which summarises a Court of Appeal judgment that was given today.

Justice Gerard Hogan, giving the judgment, said it will have “unfortunate and unintended” consequences. This includes that possession proceedings which do not fall within exceptions created by Acts of 2009 and 2013 will have to be brought in the High Court rather than the Circuit Court. This will simply create additional costs for litigants and deprive the parties of access to local courts, he said.

The judgment will have “even more serious consequences” as the general jurisdiction of the Circuit Court to deal with property disputes “is, at least, now open to question”. The court was nonetheless obliged faithfully to administer the law.

He noted the Land and Conveyancing Law Reform Act 2009, which came into effect on December 1st, 2009, conferred a new jurisdiction on the Circuit Court in mortgage cases which was not dependent on rateable valuation but that jurisdiction applies to mortgages for housing loans created after that date.

While the Land and Conveyancing Act 2013 extended the Circuit Court’s jurisdiction to mortgages for principal private residences created before December 1st, 2009, the relevant provision is effective only from July 31st, 2013, he said.

The court’s judgment concerned legal issues arising in proceedings by Permanent TSB against David Langan.

In Februay 2015, PTSB secured orders from the Circuit Court for possession of six domestic dwellings, after Mr Langan defaulted on repayments under a mortgage taken out in February 2008. Five of the properties are in north Co Dublin and the sixth is at Smithfield, Dublin.

Mr Langan appealed to the High Court where Ms Justice Marie Baker referred legal issues to the Court of Appeal for determination. Two High Court judges previously gave conflicting decisions concerning whether the Circuit Court had jurisdiction to make possession orders.

The core legal issue before the Court of Appeal centred on whether, if a property is not rateable under the Valuation Act 2001, the Circuit Court has jurisdiction to hear proceedings brought by a mortgage lender for possession orders.

Mr Langan argued the Circuit Court had no jurisdiction as all six properties in his case were constructed after 2002 and, under the Valuation Act 2001, were not rateable.

The Court of Appeal said the 2001 Act specially provides that domestic dwellings, with some minor exceptions not relevant to this case, shall not be rateable. Apartments and mixed use premises are rateable in some limited circumstances, it noted.

In this case, all six properties are domestic dwellings, Mr Justice Hogan said.

When, under the 2001 Act or otherwise, a property is not rateable, the Circuit Court’s jurisdiction to make possession orders under the Courts Supplemental Provisions Act 1961 is excluded and the Circuit Court also has no jurisdiction if the property does not have a rateable valuation over €253.95.

My Comment
The judge stated that the judgment will have “unfortunate and unintended consequences”. It will certainly mean that any circuit court cases captured by the judgment will have to be abandoned, which may have adverse cost consequences for the plaintiffs. It will also mean that many cases will have to start from scratch again in the High Court, which could take years. The judgment will certainly give an opportunity to some families to now negotiate deals with their lenders.

Mason Hayes & Curran have published a useful summary of the recent Mars Capital decision.  Their detailed review may be seen at the following link:
Following the acquisition of a loan portfolio from Irish Bank Resolution Corporation Limited (“IBRC”), Mars Capital Ireland Limited (“Mars”) sought an order substituting it as plaintiff in lieu of IBRC, in the proceedings against the defendants.
As there were over 500 Circuit Court proceedings relating to loans in the portfolio, rather than bringing standalone applications in each set of proceedings, Mars adopted the practice of making one omnibus application for an order substituting it as plaintiff in lieu of Irish Nationwide Building Society, Anglo Irish Bank Corporation Limited, or IBRC as appropriate in each of the Circuit Court proceedings.
Their application was refused by the court.

Likely effects of the judgment

The decision affects Circuit Court cases only. The option of making an omnibus application in the High Court is not affected by this decision.
However, the finding that each of the Circuit Court cases should be dealt with individually rather than leaving it to the discretion of the Judge in the appropriate circuit to deal with an omnibus application in respect of each circuit appears likely to require hundreds of separate applications to be made across all of the circuits in Ireland.
Comment (By Mason Hayes & Curran)
In light of the decision, it seems likely that acquirers of loan portfolios who wish to be substituted as plaintiff in any related Circuit Court proceedings may face difficulties if an omnibus application is issued in each circuit.
Consequently, the additional time and cost implications will need to be considered at both the diligence stage of any acquisition and, subsequently, when a decision is being made regarding the merits of continuing with any such proceedings or identifying alternative approaches on a case by case basis.

The Court of Appeal delivered judgment on 13th July 2016 in respect of two judgment mortgages that Muintir Skibbereen Credit Union (“the Credit Union”) had obtained.

The issue before the court was whether it would be appropriate to grant an order directing the sale of jointly owned family homes to enable the discharge of a judgment debt obtained by the credit union against one of the spouses. In a judgment delivered in the High Court on 23rd January 2015, White J. refused to grant the Credit Union the orders in these two cases which it had sought pursuant to s. 31 of the Land Law and Conveyancing Act. The Credit Union appealed against that decision.

The appeal represented the first occasion in which the principles governing the possible partition and sale of a family home have fallen to be considered by either the Court of Appeal or the Supreme Court following the enactment of s.31 of the 2009 Act and its coming into force on 1st December 2009.

Background The decision of the High Court concerned two separate special summonses issued by the Credit Union against the defendants. In both cases the Credit Union sought a well charging order and the sale of two separate properties which in both instances comprised family homes. In the first appeal, the first defendant, Mr. Cornelius Crowley, jointly owns the family home with his wife, Ms. Breda Crowley. In the second appeal, the first defendant, Mr. Brendan Hamilton, jointly owns the family home with his wife, Ms. Breda Hamilton.

In the case of Mr. Crowley, judgment was obtained by the Credit Union on the 5th October, 2011 for the sum of €562,500, and a judgment mortgage was registered on his interest in the family home.

Ms. Crowley never signed any documentation providing the family home as any security for the commercial loan and nor was she involved in any way in respect of her husband’s application for a loan.

In the case of Mr. Hamilton, judgment was obtained by the Credit Union for the sum of €562,500. Just as with the case of Ms. Crowley, Ms. Hamilton never signed any documentation providing the family home as security and nor was she involved in any way in respect of her husband’s application for a loan.

All other property assets which Mr. Crowley and Mr. Hamilton previously owned have subsequently been sold, so that the only properties which remain available to satisfy the judgment debts are the respective family homes.

The judgment of the High Court The High Court White J. refused to make the orders sought, saying:

“It is within the Court’s discretion to decide if it is appropriate to grant the well charging order, and to order partition and sale. The Court in its discretion refuses the application of the plaintiff in respect of both defendants, for the following reasons:

“(1) Both the properties are the family homes of the respective defendants.

(2) Breda Crowley and Breda Hamilton, the spouses of the respective defendants, were never consulted about the commercial loan drawn down by the defendants from the plaintiff.

(3) The spouses, Breda Crowley and Breda Hamilton, never signed any documentation providing the family home as security.

(4) The personal circumstances of Breda Crowley with responsibility for three dependant children of ages 13, 8 and 6 and those of Mrs. Hamilton who is suffering from ill health are taken into account by the Court.

(5) Both defendants are in serious debt, and 50% of the net proceeds of any sale of the family homes due to the spouses, would not provide either family with sufficient resources to purchase another family home.

(6) The orders sought by the plaintiff are refused.”

The jurisdiction of the High Court to order partition or sale under s.31 of the 2009 Act The jurisdiction of the High Court to order partition or sale is now set out in s. 31 of the 2009 Act.

It has been stated that s. 31 gives the court “a free hand in deciding what the appropriate order is” and that the use of the permissive “may” in s. 31(3) “reiterates the court’s discretion”.

The court held that the starting point is that the discretion conferred by s. 31 of the 2009 Act must be exercised in a constitutional fashion. This means that, where appropriate, the Court must endeavour to balance and respect competing constitutional rights, including the property rights of the judgment mortgagees and those of the spouses.

The second factor is that the lending by the Credit Union in both instances was unsecured and personal to each judgment debtor. This had the consequence that neither Ms. Crowley nor Ms. Hamilton were consulted regarding the taking out of these loans by their respective spouses and neither were they required to sign or execute any documentation.

The court found that the 1976 Act itself reflected a fundamental policy choice made by the Oireachtas which – reflecting constitutional values embraced in both Article 40.5 (inviolability of the dwelling) and Article 41 (protection of family life) – sought to prevent the sale or disposal of the family home by the unilateral act of one spouse at the expense of the other.

The Court said it was true that the rights of the judgment mortgagee are liable to be defeated if the two family homes in question are not sold. But it said that the Credit Union’s entitlements cannot prevail as against the rights of the two innocent parties, namely, Ms. Crowley and Ms. Hamilton, who had nothing to do with these transactions and who did not give formal consent to them..

But the Court held that whatever might possibly be the situation where the sale of a particular family home would leave the innocent spouse with a net equity sufficient to purchase another property this possibility simply does not arise in either of the two cases under appeal.

Judgment The Court did not make an order for sale of the family homes in question pursuant to s. 31(2)(c) of the 2009 Act, principally because the effect of any such order would be to direct the sale of the family home over the wishes of the innocent spouse who was not a party to the loan transaction which gave rise to the judgment mortgage in the first instance and who had never formally consented to same.

The Court did not express any concluded view as to whether that, in a future case, the innocent spouse might be in a financial position to purchase another family home were the existing family home to be sold at the behest of the judgment creditor.


There is, in my view, an unique opportunity for people who have split mortgages to do “permanent” deals with their mortgage providers, and write down the value of current mortgages to the current value of the family home.

The Association of Personal Insolvency Practitioners have been provided with a Counsel’s opinion that advises that split mortgages are not permissible under the Personal insolvency Act 2012.

Everything revolves around the interpretation of Section 102(6)(d) of the Personal Insolvency Act 2012 which states the following:

that the secured debt payments due to be made by the debtor be deferred for a specified period of time which shall not exceed the duration of the Personal Insolvency Arrangement

Counsel’s interpretation of the section is that a “split” mortgage is not effectively allowed under the Act. There have been many PIA’s already approved by the courts that have incorporated split mortgages, on the basis that the banks would only vote in favour of a PIA if  a split was incorporated, and thus debtors were forced to incorporate splits. However, with the introduction of Section 115A into the Personal Insolvency Act, banks can no longer “veto” “reasonable” PIA’s.  Writing down  a mortgage to the market value of a property  may be considered “reasonable” by the courts.

The ISI issued the notice below to PIPs yesterday:

The ISI has published a variety of Debt Solution Scenarios on our website setting out examples of how Debt Relief Notices, Debt Settlement Arrangements and Personal Insolvency Arrangements might work in practice. As emphasised both on our website and in each scenario published by us, these scenarios are for illustrative purposes only as to how a particular arrangement might work in practice. They were created to help explain some of the concepts contained in personal insolvency legislation and to illustrate how each of three schemes under the Personal Insolvency Act 2012 (the “PI Act”) may operate in respect of a debtor, personal insolvency practitioner or approved intermediary, creditors and the Court.

One such scenario relates to a Personal Insolvency Arrangement (“PIA“) which comprises a split mortgage. This scenario was published by the ISI in August 2013 (the “Split Mortgage Scenario“). In this scenario the repayment of the warehoused amount is postponed until the end of the mortgage term (which post-dates the end of the PIA term) but, to address sustainability concerns, there are stipulations as to what happens in the event that the borrowers cannot discharge the warehoused amount at that time.

Concerns have been raised by one stakeholder to the ISI as to the appropriateness of including a split mortgage solution in a PIA where the warehoused amount falls to be paid at a date subsequent to the expiration of the PIA term provided for in the arrangement. The stakeholder is of the view that this split mortgage solution may be incompatible with the PI Act. It is our understanding that this interpretation (“Incompatibility Interpretation“) is based on a reading of section 102(6)(d) as creating a mandatory requirement that no deferral of secured debt payments under the PIA (in particular, the warehoused amount in a split mortgage) may exceed the term of a PIA.

Having received a request to have our Split Mortgage Scenario removed from our website by the relevant stakeholder, the ISI procured the advices of our external legal advisors (“External Counsel“) to assess whether the Incompatibility Interpretation presented has sufficient merit such that it would no longer be appropriate for the ISI to continue to publish our Split Mortgage Scenario on our website. Split mortgage solutions have been applied by Personal Insolvency Practitioners (“PIP”) and have readily been agreed by secured creditors as a basis for the treatment of mortgages in arrangements. Such arrangements have been approved by Court.

Following receipt of External Counsel’s legal advice, the ISI remains fully satisfied to leave the Split Mortgage Scenario on our website.

The ISI will continue to monitor developments in this area and should a court uphold the Incompatibility Interpretation, the ISI will of course re-consider the Split Mortgage Scenario.

I understand that the ISI are adopting a “neutral” stand on the interpretation issue, and will wait for the courts to issue a judgment in respect of it.

If the legislation has been “incorrectly” drafted, it is possible that the interpretation issue may be resolved by amending the legislation (to allow, for example, the possible incorporation of split mortgages). It follows that the existing opportunity to do deals on split mortgages may be limited in future.

The Irish Independent published  an article on 14th April 2016 which we wrote on dealing with Vulture Funds.  We have practical experience of dealing wit  all the banks and the various vulture funds such as Havbell Promontoria PTSB Beltany Feniton Cerberus Cabot and Tanager

The article may be accessed on the following link:


Due to space considerations the paper was unable to publish the full original article, which we set out below:

The term “vulture fund” is a metaphor used to compare hedge funds to the behaviour of vultures “preying” on debtors in financial distress by purchasing the debt at a discount to make a large gain.

The commencement of the “vulture fund” industry in Ireland was in 2011, with the sale of €400m of loans as part of Bank of Scotland’s first ever portfolio sale in the market. In 2012, Bank of Scotland dominated the market with 3 trades totalling €2.6bn traded to Apollo, Carval and Deutsche Bank/Kennedy Wilson. Following the 2012 initial GE trade to Pepper, 2013 saw the emergence of whole loan residential mortgage portfolio trades. Total sales were however, dominated by IBRC and Bank of Scotland sales totalled €4bn in the year. 2014 saw €28bn in portfolios traded, dominated by IBRC liquidation trades and the emergence of Ulster Bank as a key seller. 2015 saw €22.5bn in portfolios traded, dominated by NAMA, LBG and Ulster Bank.

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