High Court winds up Berehaven Credit Union
A credit union in County Cork has been wound up by order of the High Court.
Berehaven Credit Union in Castletownbere has 3,500 members and a shortfall in its regulatory capital requirements of €1.3m.
The winding up petition was made by the Central Bank who argued liquidation was in the public interest.
The court heard deposits of up to €100,000 will be guaranteed under the Government's deposit guarantee scheme.
The court order could not be made public until this afternoon to avoid a run on the credit union.
The Board of Berehaven Credit Union’s responded to today’s Central Bank statement.
The Board's statement said: "While the Board, all of whom are voluntary, unpaid members, accept that in the past there may have been poor governance and oversight, wish to state that these matters had been addressed by the Board in recent years and serious steps had been taken by the Board to address these fundamental flaws.
"The Board worked hard to maintain the viability of the Credit Union by addressing its debt provisioningand its deficit by reducing it from €800,000 to €60,000 in the space of four years.
"Whilst the Credit Union did everything it could to address the liability side of the business it was impaired in growing its loan book by the severe restrictions placed on it by the Central Bank. Any business that is impeded in growing its income is destined to fail.
"The Board are saddened to now learn from the redacted report to the Governor of the Central Bank by the Special Resolution Unit that an expensive liquidation of its business was deemed preferable to a direct transfer of the assets and liabilities of the Credit Union to a transferee Credit Union.
"Due to its isolation, where it is forty miles from the nearest Credit Union, it is simply not credible to say that the public interest has been safeguarded. The Board would like it known that they have done everything in their power to fight the closure but, without the necessary financial support from the Irish League of Credit Unions, they could not survive.
"The Board would like to thank all of its members, its hard working staff and the community which it has loyally served for almost forty years. The Board is closely reviewing the Central Bank Statement and the Special Resolution Unit Report sent to the Governor and reserves the right to make further statements in the coming days."