I have been advised by the Special Liquidators that, in an insolvency situation, duress payments to unsecured creditors are often required to be made to ensure the on-going provision of services. Such payments are a matter for the Special Liquidator and I have no role in the initiation or authorisation of these payments. On the appointment of the Special Liquidators on 7 February 2013, the employment contracts of the employees in the Republic of Ireland were terminated. I have been advised by the Special Liquidators that 802 of the 809 employees in the Republic of Ireland were re-hired to assist with the liquidation of IBRC.
As the Deputy is aware, the legislation surrounding liquidation ranks employees as preferential creditors in respect of certain amounts owing to them on a winding up, including accrued wages and salaries, holiday pay, sick pay, statutory redundancy, pensions contributions and claims for damages arising from accidents. Any claims over and above that described above will rank as an unsecured claim in the liquidation process.
There are standard rules which apply to the distribution of the assets of companies in liquidation and it would not be appropriate for me to interfere with these rules. Any action taken by the Minister which might divert the assets from IBRC creditors to employees could be challenged in the Courts.
The Special Liquidators have said that it is their key priority that all employees are fully kept up to date on all developments during the course of the special liquidation. They have indicated that their approach will be to talk with employees directly either in small groups or on a one to one basis and they also plan to communicate by email general updates to employees during the course of the special liquidation.