Good post Andy.
What I find odd is the fact that this is a simple calculation to do (reference rates are publicly published & everyone has excel) - how would it be possible that this was endemic and no one picked up on it and no one challenged it in the courts?
Either way, i think these should be classed as unsecured creditors which could be the best result from the taxpayer. I would expect some debtor's who can repay their debt may seek to have the balance due offset by the overcharged amount (they could face problems though if their debt was sold to an other owner).
I would certainly expect any overcharging to be dealt with 'in-house' where overcharging is quietly set against existing debt, but that raises a very significant issue. Why is the taxpayer on the hook for it? If it was just an accounting error then any claim is beyond the statute of limitations, and if it was deliberate fraud then a) the Irish taxpayer should be protected from it, and b) someone should be doing a long term of jail time.
Why are we paying anything towards this?
I had a read of Eddie Fitz's testimony & the subsequent cross examination of Kieran Wallace over lunch. Cost me $15!!!
I note Wallace didn't object to the claim but he stated:
(i) these issues were addressed by the former management team between 2010 & 2012 i.e. pre-liquidation,
(ii) checks were issued to affected borrowers,
(iii) some (few) borrowers chose not to cash the issued checks (seeking to get more money back).
(iv) Subsequently the Bank went into liquidation and these claims are now "unsecured". As such, Wallace didn't waste time looking into the calculations as he wasn't sure there'd be a surplus for unsecured creditors.
(v) As part of the liquidation, they reviewed the overcharging issues & were satisfied it was no longer continuing,
(v) Flynn was looking to take his case in the US so as to attach his claim to IBRC's US assets - effectively gaining structural seniority to Irish unsecured creditors - which includes the Estate of IBRC in liquidation as its the shareholder in the US subsidiaries. And consequently, the state. I think theses claims would be senior to the states anyway.
(vi) IBRC's lawyer noted, the overcharge claims re fraud etc. were hearsay - as Flynn's agent (Bankcheck) made statements about deceptive practices etc. yet at the same time was seeking a huge volume of information, which he would require to prove his point. Essentially, he was assuming this but didn't have any proof.
Regardless, they lost the first case when Chapter 15 protection was afforded to IBRC and their subsequent case in NY was lost of forum grounds (it's a decision for the Irish courts not US)