13 November 2017
By Bryan Smyth
Following an application by the Central Bank of Ireland, the High Court today appointed liquidators to Charleville Credit Union Limited (“Charleville”). Provisional Liquidators had been previously appointed on 13 October 2017.
The Central Bank decided to use its legal power to apply for the winding-up of Charleville having given due consideration to the circumstances detailed in the Resolution Report and Wesley Murphy’s affidavit, documents which are published today in partially redacted form.
These documents detail breaches of a number of regulatory directions and contain information about Charleville’s distressed financial position. In the absence of taking this action, it was the Central Bank’s view that there could have been a disorderly failure of the credit union.
In presenting its assessment to the court, the Central Bank outlined its belief that all feasible options available to the credit union to raise and maintain its reserves at the levels required by law had been exhausted. The Registry of Credit Unions had engaged with Charleville over a number of years seeking remediation of the weaknesses in its financial position. The Central Bank’s view was that the credit union has been provided with the opportunity to address the issues concerned and, in the opinion of the Central Bank, they had not been adequately addressed.
Since the appointment of the provisional liquidators, the Deposit Guarantee Scheme, administered by the Central Bank, has issued compensation payments through the to approximately 10,900 members of Charleville. The total amount of compensation paid to date amounts to €39.2 million, representing over 99% of depositors covered by the Scheme. Members received their payments from 25 October 2017.
A statement from the Central Bank concluded “The Central Bank remains fully supportive of the credit union sector in Ireland and is committed to the continued development of a strong and sustainable sector that meets members’ changing needs and protects their savings.”