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 Liquidators and I have no role in the initiation or authorisation of these payments. 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 by way of the use of Section 9 of the Irish Bank Resolution Corporation Act 2013 or otherwise. Such interference could have the impact of diverting the assets of IBRC from one category of creditor to another outside the normal Companies Acts priorities. Any such interference would be open to challenges in the Irish Courts by unsecured creditors.
The Special Liquidators have advised that there is on-going interaction between the IBOA and the Special Liquidators. The Special Liquidators have indicated that they are highly cognisant of the issues that the IBOA have been highlighting and that significant steps have already been taken to address those concerns including the announcement on Tuesday 19 March by the Special Liquidators that contracts of staff would be extended out to 7 August with one month’s notice thereafter. This should provide some reassurance to IBRC staff relative to the common position in liquidations where staff contracts are terminated.