The special liquidators of Irish Bank Resolution Corporation (IBRC) say they will "vigorously" fight any attempts to frustrate the wind-down of the bank via US courts, after a slew of fresh objections emerged yesterday to the bank's US bankruptcy proceedings in Delaware.
Two entities linked to IBRC borrower Castleway Properties, which is controlled by the Swiss-based developer John McCann, yesterday filed objections to the proceedings, due to start on Friday. Granada Highlands and TBCI, two borrowers linked to an unnamed Boston-based developer with Anglo debts of $378 million, also filed an objection. John Flynn, who developed parts of Smithfield in Dublin using Anglo money and who has accused IBRC of fraud in separate case, has also filed a second objection, following on from another last week.
The objections have arisen because the liquidators, Kieran Wallace and Eamonn Richardson of KPMG, have applied to a Delaware court for Chapter 15 protection for the bank. This protection would prevent its $1 billion of assets in the US being seized by creditors while the bank is being wound down in Ireland.
The objectors – who are all creditors or litigants in US courts against IBRC – say it should be denied Chapter 15 protection for its US assets, which would leave them free to take action to seize its US assets. They allege the special laws under which it is being liquidated, which were passed by the Dail in an emergency overnight session earlier this year, disenfranchise creditors unfairly in favour of the Irish state.
Vulture funds
It emerged earlier this week that vulture funds controlled by Paul Singer, a US billionaire, that own $75 million of Anglo Irish Bank subordinated loans, are threatening to upend IBRC's bankruptcy. Mr Singer's funds, Burlington Alpha and Beta, are expected to seek subpoenas obliging Mr Wallace and Mr Richardson to appear before a US court. They also want access to documents about IBRC and its relationship with Nama.
Vulture funds linked to Mr Singer, a high-profile Republican supporter who bought IBRC debt at a steep discount in recent months, have a track record of frustrating state-backed bankruptcies in US courts. Singer’s Elliott Management recently won a $1.3 billion case against the Argentine government over its default of a decade ago. “The Special Liquidators are confident they will be successful in their application for the protection of the US courts and confirm they will vigorously oppose any challenges to their Chapter 15 petition,” said a spokesman for Mr Wallace and Mr Richardson. “These proceedings have no impact on the IBRC loan sales process currently under way.”
