The High Court has ordered that the State is to have control of unclaimed monies from the Custom House Capital (CHC) liquidation.
If future claims materialise, applications can be made to the court to have them paid out.
The investment firm collapsed in 2011 and liquidator Kieran Wallace found €61m in client funds had been misappropriated. Some €41m was recovered and by March 2023 €39m had been reimbursed to clients.
Yesterday, Mr Justice Brian O’Moore said he was satisfied that a provision of the Companies Act 2014 could be used for the distribution of the unclaimed monies whereby they will be held in an account controlled by the Minister for Finance and after seven years will be transferred to the Exchequer.
Any claims that then arise, whether within the seven-year period or afterwards, will be dealt with by the claimant applying to the court seeking they be paid.
The judge was giving his decision on an application by the liquidator on how he should deal with recovered misappropriated monies and pooled client assets, or “rump” monies, which remain undistributed and undistributable at the conclusion of the liquidation.
The judge said there were a number of reasons why such monies will be impossible to distribute.
For instance, he said the official liquidator had identified the fact that in some cases no contact can be made with some clients, while others have not engaged sufficiently for the purpose of receiving monies due to them.
This created a difficulty for the liquidator who is anxious that the liquidation be concluded. The liquidator had proposed four possible solutions, including keeping the liquidation open and continuing to try to contact clients who had not responded.
It was also suggested a trust could be set up to distribute monies or they could be distributed proportionately among those clients who had engaged and already been paid. The judge said it would be “intolerable” to allow the liquidation to remain open.
The process had already cost €825,400 over 10 years.
The trust option was also costly. The option of “giving away one investor’s money to another investor” was difficult to justify, he said. The liquidator had also identified a lack of any legislative basis for such action, he said.
Source: Tim Healy, Irish Independent, 21st of February 2025.