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Thread: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

  1. #1
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    Default Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Not all of them, mind you, and probably not the small town ones. Still a hugely significant development for the professionals that really lost the run of themselves during the boom.
    From the ST Biz section last Sunday by Brian Carey and Aine Coffey:
    Lone Star and CarVal, two American investment funds, are this weekend circling over a 6000 million euro debt portfolio containing non-performing loans extended by the former Anglo Irish Bank to members of the legal, medical and accounting professions.The IRBC loan portfolio, known as the ‘doctors and dentists book’, is expected to be sold this week for as little as 20% of its par value, as part of the liquidation of the bank.
    The loans, advanced throughout the former Anglo Irish Private Bank, funded the participation by well-heeled professionals in boom-time property syndicates, share purchases and other investments.
    As many as 500 professionals are believed to have loans within the highly distressed portfolio. The sale by KMPG, the special liquidator to the bank, could herald a get-tough policy on the loans from the book’s new owner.

    Lone Star and CarVal have also been named this weekend as bidders for 3.8 billion of Irish Nationwide mortgages being sold as part of the IRBC liquidation.
    20%, huh? So that's 'get tough'?
    The vulture fund should make 10 or 15%, the hapless professional gets perhaps a 65 or 70% debt write offf and Joe Citizen picks up the bill.
    What's not to like?
    Last edited by PaddyJoe; 20-03-2014 at 10:56 PM.

  2. #2
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    Default Re: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Predictable result for the greedy professional class.

  3. #3
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    Default Re: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Uh, this thread title is totally incorrect. Selling the loans for 20% of their value does not equate to a write off of that amount for the borrower.

    It just means that they will owe 100% to somebody other than Anglo.

    If anything the borrowers should be more concerned about owing money to American "vulture funds" than to Anglo, as the Americans are less likely to be influenced by political concerns or personal relationships. They want to get as much blood out of these turnips as possible and are probably perfectly willing to pursue bankruptcy if that's in their interests.

    Which is why there have been tales of certain borrower buying their own loans at a huge discount....but that doesn't appear to be the case here.

  4. #4
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    Default Re: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Quote Originally Posted by evil_g View Post
    Uh, this thread title is totally incorrect. Selling the loans for 20% of their value does not equate to a write off of that amount for the borrower.

    It just means that they will owe 100% to somebody other than Anglo.

    If anything the borrowers should be more concerned about owing money to American "vulture funds" than to Anglo, as the Americans are less likely to be influenced by political concerns or personal relationships. They want to get as much blood out of these turnips as possible and are probably perfectly willing to pursue bankruptcy if that's in their interests.

    Which is why there have been tales of certain borrower buying their own loans at a huge discount....but that doesn't appear to be the case here.

    I'm not claiming that the professionals involved here are going to have 80% of what they owe written off. However, the state has decided to accept 80% losses on these loans presumably based on an assessment by KMPG. I find it very difficult to believe that these 500 professionals made such bad decisions that the value of their collective investments have been written down by 80% by IRBC.
    I note that there haven't been any protests or questions in the Dail.
    Curious given the outrage over the 13 thousand former Nationwide mortgages that are being sold off this week as well.
    I'd guess that most of the 'doctors and dentists' are quite happy with the prospect of being left with such an advantageous starting position in negotiations on their debts.


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    Default Re: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Curiously that paper didn't mention the judges as they were buying various holiday homes & other properties in Co. Kerry availing of tax break called section 23 -property relief.

    Surely, they would be saddled with huge debts around their necks. By the way recently, senior judges made representations to FG/Lab govt over reduced take home net pay. That tells us more about their debts.

  6. #6
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    Default Re: Anglo debt write offs for doctors, lawyers and accountants to be confirmed this week

    Sold...
    CarVal, an American investment fund, has emerged as the successful bidder for a €600 million non-performing debt portfolio owed by professionals to the formerAnglo Irish Bank.The loans were extended to lawyers, medical consultants, accountancy partners, sports stars and television personalities by the bank during the boom. This was to allow them participate in property syndicates, buy shares and make other investments.
    CarVal is understood to have bought the loans at a discount of greater than 70 per cent. This reflects the mixed financial strength of individual borrowers and the variable levels of recourse that the bank loaned its clients money ranging from zero to a full personal guarantee
    In many cases Anglo’s private bank division approached its high-net worth clients with investment propositions where it offered to loan syndicates of borrowers not just the debt to buy large commercial properties but also the original equity.Individual borrowers range from a senior counsel with debts of over €30 million to employees of Anglo Irish Bank with borrowings of a few hundred thousand euro.
    The so-called “doctors and dentists” book is tranche eight in Project Stone, a €9.3 billion loan portfolio that KPMG, the special liquidator of Anglo, announced on Tuesday had been sold.
    CarVal has been an active bidder for Irish and European distressed assets having raised different multibillion funds to do so. Its Irish assets are managed out of London. Bobby O’Brien, former head of debt restructuring at Bank of Ireland, is an adviser to CarVal on loan portfolios since April 2013.
    To date KPMG has sold IBRC loan assets with a par value of some €19.8 billion out of a total book of €21.7 billion
    http://www.irishtimes.com/business/s...book-1.1749419

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