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.
NAMA Wine Lake 
[…] Pearse Doherty: To ask the Minister for Finance if he will confirm theamount of debt forgiveness that will be provided by Allied Irish Bank to Independent News and Media as […]
@ NWL,
That’s only one side of the story…..
“And how many millions of a writedown has Denis received via his stake in IN&M?”
How many millions has DOB lost on the shares in INM? I believe it is somewhere around 500 million euro, perhaps more, maybe as high as 700m.
@Sporthog
Nor very sporty, old hog!
I have no problem with DOB or anybody else losing an investment, particularly an investment that had a whiff of personal rivalry about it.
The reason why the Irish citizens and taxpayers should write off debt for the above companies, while making sure that the current owners remain in charge escapes me.
Both companies should have been put into receivership and sold to the highest bidder.
Joe,
“sold to the highest bidder.”
Don’t forget to include RTE…. they get a subsidy of 160million / year approx from the taxpayer.
If any organization should be privatized, it’s RTE.
Can any of the brainy people on here explain to me why the data protection rules and customer confidentiality cease to function in the case of personal insolvency yet operate in the above?
Why does govt bail INM TCH who decides which Is to be rescued or who goes down the swany why is Sean Quinn being pursued relentlessly when TCH +INM Can so Easley avail of such generous help. I would hazard a guess the Quinn group employed many more hundreds than INM or TCH together .
It seems to me govt has plumped for media outlets In the knowledge of favourable write ups,
I don’t see anything wrong with names being on a register. Hopefully it will encourage full disclosure of assets in the insolvency process. I’d like to see a wider register where anyone getting debts written down are listed. I consider some banks’ employees have decided the staff are the only stakeholders worth worrying about and minimising losses to the state isn’t all that important. Take AIB, for example, and the money pumped in to the staff pension fund. IIRC AIB staff have borrowings in excess of 1bn from the bank. As a taxpayer, how can we be sure that bank staff (or friends or ‘connected’ folk) won’t be gifted sweet deals and never get to an insolvency stage.
http://www.rte.ie/news/business/2012/0309/314473-presswatch/ . Seems aib staff borrowings are 2.5bn. At little more than I’d suggested above.
Debt Forgiveness by state banks to billionaires a secret smacks of Illegality to me has anyone sussed the constitutionality Of this massive debt being imposed on the unsuspecting citizens I’m no schooler but it smells to high heaven. Is there a mini republic operating within the executive.
Was bank guarantee constitutional In the first place everything done since seems like corruption where CB with assistance from state broadcaster RTE try’s to lump corporate write downs as household debt forgiveness ,
Debt for equity usually leaves equity toasted, however if equity injects new money, then that equity puts the existing owners back in the game
What are the “little people” complaining about….. Shure they have their own bailout c/o the Central Bank of Ireland. Chairman Mao couldn’t have thought of a better program name:
“Framework for a Pilot Approach to the Co-ordinated Resolution of Multiple Debts owed by a Distressed Borrower 8 May 2013”.
It shows how far from reality those living in the ivory towers of the civil service actually are.
We are rapidly approaching the servile ideal of the EU beloved by our German masters. This country was founded on the principle that individuals should not be subject to the control of a powerful state. That founding idea has never before been in greater peril because of the proxy actions of our Central Bank attempting to ensure that a further refinancing of our insolvent banks will not be necessary…. An impotent exercise. As for the framework document, the citizens will react to it with the risible response that it deserves. I doubt that we will hear of it again after the “trial period”.
So how well is our current government looking after the “little people” compared to the billionaires and merchant princes? Judge for yourself.
The November 2011 Declaration of Principles of the Party of European Socialists (PES) summarises the European socialist agenda as follows:
The welfare state and state-provided universal access to education and health care are society’s great achievements. (Compare that with the rationing of healthcare in today’s Ireland by the removal of hospital beds and reduction of frontline staff)
A strong and just society must ensure that the wealth generated by all is shared fairly as determined by the state. (Translation: more taxes to pay for the money given to the bondholders. Doing well on this one)
Ensuring long lasting prosperity, stability and above all, peace requires effective coordination in the international realm based on democracy, mutual respect, and human rights. (Sorry, you’ll have to go to Google translator for this one, it’s beyond my capability. And what’s prosperity?)
A strong state must preserve the public good, guarantee the common interest, promote justice and solidarity and allow people to lead lives rich beyond material wealth, so that each individual’s fulfillment is also part of a collective endeavor. (Definitely an F here).
Nope, it’s a slam dunk for the merchant princes.
@ Frank Street. My understanding is that the new personal insolvency options are voluntary, on both debtor and creditor side. Name on register is one of the outcomes of entering. You dont like it you dont look for an arrangement. That is my reading of why data protection doesnt come into it here; in that you are effectively waiving right to privacy in exchange for future solvency.
The nuclear option, bankruptcy, is also public information.
Socialism for the rich, where is the Financial Regulator in all this?
Personal insolvency is a Dept of Justice initiative!! who has top trumps there I wonder?
@ Don Giovanni. Thanks for that. Your answer makes perfect sense. Shame that public declarations aren’t a condition of bank write-downs for the billionaire classes, isn’t it?
(But they could be?)
@FrankStreet
Would be interesting alright, but Id imagine it is more to protect the Banks than the borrowers that they are not.