All has gone quiet on the new personal insolvency schemes until the end of June 2013, when the Insolvency Service is set to open for business, and it may be the end of 2013 when we have our first personal insolvency cases processed. At that point, people will find themselves on a public register with their name, addresse and age. In a country where the quarterly tax defaulters’ list still instills shame, the humiliation of being published in the insolvency record will not be easy, particularly for those working their way through debts which resulted from the property boom/crash and unemployment.
They may also want to contrast their naming-and-shaming with the approach adopted with the recent debt writedowns at Thomas Crosbie Holdings and Independent News and Media.
TCH is the publisher of the Irish Examiner, Evening Echo, Sunday Business Post and other local papers as well as the operator of local radio stations, and it has been given a debt writedown by AIB. We presently own 99.8% of AIB and next Monday, we will own 99.99% of AIB when it pays us in ordinary shares, a dividend on our preference shares. In March 2013, just before TCH entered a pre-pack receivership and, in the case of the Sunday Business Post, an examinership, it is understood that TCH owed €28m to AIB; and although we don’t know the debt writedown that was obtained as part of the receivership/examinership, the betting on here is that the writedown was more than €10m. Most of the papers and radio stations in TCH are now owned by Landmark Enterprises which is controlled by Ted and Tom Crosbie, shareholders in the old company and the fifth generation in the dynasty of Cork newspaper owners.
A €10m writedown may be large in comparison with some of the modest writedowns that people undergoing the personal insolvency scheme, will see, but is tiny in comparison with the debt writedown at Independent News and Media, Ireland’s largest newspaper publisher which counts amongst its stable the Independent, the Sunday Independent, the Sunday World, the Herald, the Belfast Telegraph and Sunday Life. Last month it reported that its banks were to writedown €138m of about €430m of loans. Both AIB and 15% state-owned Bank of Ireland were two of 6-8 banks with loans to IN&M, and it is believed both had around €80m of loans outstanding. Again, the state will be taking a big hit. IN&M is 30% owned by Denis O’Brien, who, with wealth estimated at €4bn is Ireland’s second richest person. And how many millions of a writedown has Denis received via his stake in IN&M?
You may never know. In the Dail this week, the Minister for Finance Michael Noonan was questioned about the writedowns. The response was curt – “due to data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances”
Alas, data protection won’t save the humiliation of those named-and-shamed on the new personal insolvency register.
The parliamentary questions and response are here:
Deputy Pearse Doherty: To ask the Minister for Finance if he will confirm the amount of debt forgiveness that will be provided by Allied Irish Bank to Independent News and Media as part of the latter firm’s recently announced reorganisation plans.
Deputy Luke ‘Ming’ Flanagan: To ask the Minister for Finance if he will state, in both absolute and percentage terms, the amount of the debt being written down by wholly and partly State owned lending institutions for Thomas Crosbie Holdings Ltd. and Independent News and Media Ltd; and if he will make a statement on the matter.
Deputy Luke ‘Ming’ Flanagan: To ask the Minister for Finance the percentage stake the State will now hold through Allied Irish Banks and Bank of Ireland in Independent News and Media Ltd. as a result of the debt for equity swop to facilitate the write down of INM Ltd. debt; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: I propose to answer questions 132, 150 and 152 together.
I have been informed that due to data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances.