Brendan Burgess
Founder
- Messages
- 52,119
The full [broken link removed] prepared by the Central Bank is well worth reading. It would be funny, if it wasn't so tragic.
I attach the key page which sets out the figures. Here they are in more readable form
|as reported| after setting off{br} attached shares
Member shares|29.9 |28
Other creditors|0.4|0.4
Total liabilities|30.3|28.4
|
|
Cash deposits and investments|26.2|26.2
Liabilities after paying all the cash to members|4.1|2.2
Gross loans to members before provisions|5.9|4
Fixed assets (mainly the building)|0.7|0.7The book value of loans is €5.9m
But these borrowers have €1.9m in shares as security for these.
So set this money off against the debt, and the CU is left with €4m in debtors before any provision for bad loans.
Use the €26.2m in remaining cash to pay off all the other shares, and the CU would be left with €2.2m to pay shareholders and creditors.
So even if it got nothing for the building which cost over €5m to build, they would have to collect only 55% of the debtors to pay off the shareholders in full.
There would be no cost to the taxpayer or the restructuring fund.
Instead the Central Bank paid Tralee Credit Union €2.1m to take over the assets and liabilities of Killorglin Credit Union.
Now Tralee CU will be taking in €26m cash which it can't lend, because it already has a surplus of cash.
This is complete madness.
The Central Bank should have simply told Killorglin CU to wind itself down in an orderly fashion. Sure there would have been a run on it, but they could have converted their savings and investments to cash ahead of the announcement to do this.
Brendan
I attach the key page which sets out the figures. Here they are in more readable form
Member shares|29.9 |28
Other creditors|0.4|0.4
Total liabilities|30.3|28.4
|
|
Cash deposits and investments|26.2|26.2
Liabilities after paying all the cash to members|4.1|2.2
Gross loans to members before provisions|5.9|4
Fixed assets (mainly the building)|0.7|0.7
But these borrowers have €1.9m in shares as security for these.
So set this money off against the debt, and the CU is left with €4m in debtors before any provision for bad loans.
Use the €26.2m in remaining cash to pay off all the other shares, and the CU would be left with €2.2m to pay shareholders and creditors.
So even if it got nothing for the building which cost over €5m to build, they would have to collect only 55% of the debtors to pay off the shareholders in full.
There would be no cost to the taxpayer or the restructuring fund.
Instead the Central Bank paid Tralee Credit Union €2.1m to take over the assets and liabilities of Killorglin Credit Union.
Now Tralee CU will be taking in €26m cash which it can't lend, because it already has a surplus of cash.
This is complete madness.
The Central Bank should have simply told Killorglin CU to wind itself down in an orderly fashion. Sure there would have been a run on it, but they could have converted their savings and investments to cash ahead of the announcement to do this.
Brendan