County councils could lose millions of euro worth of bonds burned in the late night liquidation of the Irish Bank Resolution Corporation (IBRC). The bonds were provided by developers as security that works would be completed in accordance with planning permission conditions set down by local authorities, reports the Irish Independent.
It was an “unfortunate consequence” of the decision to liquidate IBRC that “any liabilities arising under these agreements will most likely rank as unsecured claims”, Finance Minister Michael Noonan has stated.
Independent TD Catherine Murphy said there were no expectations that the bonds would be paid.
As a consequence, people who were living in developments with no street lights or proper sanitation and with holes all over their roads had no remedies.
Cork County Council holds 355 bonds worth more than €28m in a number of companies, the council’s planning director recently told councillor Seamus McGrath.
A spokeswoman for Clare County Council said €2.5m worth of bonds due to the authority were tied up in the liquidation of IBRC.
In Mr Noonan’s native Limerick, a county council spokeswoman said the authority had one IBRC bond which was currently “in limbo”.
It was worth €230,000, she said.
Kerry County Council had several bonds with IBRC and has written to the bank’s special liquidator, Kieran Wallace of KPMG.
IBRC bonds were in place for county councils in Roscommon (2), Wicklow (1), Mayo (1), South Dublin (5) and Dun Laoghaire-Rathdown (1), but there had been no issues with them to date or they would not be required to finish developments.
Galway County Council is involved in legal proceedings with a developer and homeowners over a €60,000 IBRC bond. A spokesman said “it remains to be seen how bonds in IBRC would be treated in the liquidation process”.
In Waterford, a significant number of unfinished estates have been completed using funds recovered from bond companies. A decision was taken three years ago to set up an “estate unit” in the council’s planning department.
A spokesman said there were 38 bonds that Waterford County Council had either called upon or was using to fund remedial works. He said the council had 14 bonds with IBRC worth more than €1m combined.
“Our approach was to get all the stakeholders around the table, including residents who were the most affected. We’ve taken 25 estates off our list where there would have been serious safety issues,” the spokesman said. SOurce: The Irish Independent.