Ben Gilroy Takes Back The Junction Bar from Receiver

Ben Gilroy and the owner of The Junction Bar in Glounthaune, Co Cork, decided it was time to take back the bar from the receivers who had moved in. In this TV3 report the owner politely informed the manager (in other words, the receiver) that he has been dismissed. The owner of course has the right to do this as the receiver acts as agent for both the owner of the premises, and the bank in question. As the owner or The Junction Bar did not contract the receiver to act as agent for them, the owner has no obligation for the receiver to do so.

Aside from this fact, the receiver has an equitable duty of care to both the bank, and the owner of The Junction Bar, and as they have not performed on this duty of care, the owner has opted to dismiss them. The topic is covered in more details in the video concerning Mr. Gerry Burns. In a true equitable duty of care, the receiver would need to see the tri-party agreement used to create the loan in question. It is a fair assessment to suggest that a receiver who would ask for such things from the bank (which they may not have) would not be called in as a receiver on behalf of the bank in the future. Due to this implied incentive not to ask, receivers tend not to perform as well on their duty of care to the owner of the property, as they might do for the bank that called them in the first place, rather than renegotiating the loan to see that it gets paid without need for litigation.

As ever Ben has advised the owner of The Junction Bar to give the banks nothing until they document and prove the obligation. Given the banks tendency towards securitization, they may find that challenge difficult if not impossible. Due to this, the bank may regret not just renegotiating the loan, and getting their money back more slowly and certainly surely.

Bank of Ireland Divests (Sells) 5 Billion Euros of Loans

DUBLIN (Reuters) – Bank of Ireland said it has sold or accepted repayment of 5 billion euros (4.4 billion pounds) of loans in the United States, Britain, Europe and the Middle East at a discount of around 9 percent, putting it on track meet its targets under an EU-IMF bailout.

Ireland’s government pledged to radically shrink its domestic banking sector after a disastrous binge on property loans, and Bank of Ireland, the country’s largest lender, is to sell 10 billion euros in loans and accept repayment of another 20 billion euros worth by the end of 2013.

Bank of Ireland, the only domestic lender to avoid falling into state control, said it had raised 4.54 billion euros from the sale of the loan books, a higher price than expected, meaning there was no impact on its core tier one ratio.

Bank of Ireland had a pro forma core tier one ratio, a key measure of financial strength, of 15.4 percent at the end of June.

Ireland’s banks need to shrink their loan books to reduce their dependence on emergency funding from the European Central Bank and the Irish central bank, which at the end of September stood at 153.6 billion euros.

Bank of Ireland needs to dispose of another 5 billion euros worth of loans by the end of 2013, and it said it was making good progress.

It said it was in advanced talks with potential purchasers of project finance loans.

The loans already sold include a U.S. commercial real estate portfolio valued at $1.13 billion, some 1.33 billion pounds of UK commercial property loans sold to Kennedy Wilson and institutional partners for 1.07 billion pounds, and 1.23 billion pounds of British residential mortgages sold to a unit of Britain’s Nationwide Building Society for 1.13 billion pounds.

Bank of Ireland also sold a portfolio of project finance loans with total commitments of 670 million euros to GE Energy Financial Services . The loans relate to a portfolio of energy assets across North America, the UK, continental Europe and the Middle East.

Source: http://www.reuters.com