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In The Matter Of:

In re: THE IRISH BANK RESOLUTION CORPORATION


LIMITED (IN SPECIAL LIQUIDATION)
___________________________________________________

MARK TRAYNOR
November 4, 2013

___________________________________________________

MARK TRAYNOR - 11/4/2013


Page 1

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
-----------------------------------x
In re:
THE IRISH BANK RESOLUTION
Chapter 15
CORPORATION LIMITED
Case No.
(IN SPECIAL LIQUIDATION)
13-121599 (CSS)
Debtor in a foreign proceeding
-----------------------------------x
November 4, 2013
1:07 p.m.
Deposition of MARK TRAYNOR, held at
the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square,
New York, New York, before Mark Richman
and Gail F. Schorr, Certified Shorthand
Reporters, Certified Realtime Reporters
and Notaries Public within and for the
State of New York.

1-800-325-3376

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A P P E A R A N C E S:

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP


Attorneys for The Irish Bank Resolution
Corporation Limited
300 South Grand Avenue
Los Angeles, CA 90071-3144

BY:

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8
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ERIC S. WAXMAN, ESQ.


VAN C. DURRER II, ESQ.
-andANNIE Z. LI, ESQ.
(eric.waxman@skadden.com)
(van.durrer@skadden.com)
(annie.li@skadden.com)

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LEONARD ZACK & ASSOCIATES


Attorneys for the Flynn Parties
405 Park Avenue, Suite 1001
New York, NY 10022

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BY:

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LEONARD ZACK, ESQ.


(leonardzack@lzack.com)

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O'NEILL & COMPANY


Attorneys for the Flynn Parties
240 Central Park South
Suite 23D
New York, NY 10019

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BY:

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LAWRENCE DANIEL O'NEILL, ESQ.


(ldoneill@oneill-company.com)

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1-800-325-3376

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A P P E A R A N C E S (Continued):

LAW OFFICES OF DORON A. HENKIN, ESQ.


Attorneys for Castleway Properties LLC
and Walnut Rittenhouse LP
Radnor Financial Center
150 N. Radnor-Chester Road
Suite F200
Radnor, PA 19087

BY:

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5

DORON A. HENKIN, ESQ.


(dhenkin@henkinlaw.com)

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ALSO PRESENT:
LEONA FLYNN
JOHN FLYNN
ANDREW O'LEARY
JAMES SHEEHAN

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MARK TRAYNOR, Having been

called as a witness, having been

first duly sworn by the Notary

Public (Mark Richman), was examined

and testified as follows:

13:07:40

EXAMINATION BY MR. O'NEILL:

13:07:40

Q.

Good afternoon.

13:11:49

A.

Good afternoon.

13:11:51

10

Q.

With Mr. Wallace we started

13:11:55

11

with a discussion of the types of

13:11:58

12

liquidation under Irish law and Mr.

13:12:01

13

Wallace narrowed it down to two, one of

13:12:05

14

which is a court liquidation and the

13:12:10

15

other is a shareholders liquidation.

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the law deals with those slightly

13:12:17

17

differently.

13:12:18

And

13:12:12

13:12:21

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Would you have a

19

categorization of this liquidation, the

13:12:22

20

IBRC liquidation, is it a court

13:12:27

21

liquidation or a shareholders

13:12:30

22

liquidation?

13:12:31

23

A.

It's a mixture of both.

It

13:12:31

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has elements of court liquidation and has

13:12:33

25

elements of what are called the voluntary

13:12:36

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liquidation.

13:12:39

Q.

13:12:40

Are you aware of a

shareholders resolution putting IBRC into

13:12:43

liquidation on the 6th of February?

13:12:46

A.

No, I'm not.

13:12:48

Q.

Are you aware that the

13:12:49

statement of affairs refers to such a

13:12:55

resolution?

13:12:59

10
11

A.

I can't recall seeing that in

13:13:04

the statement of affairs.

12

Q.

13

liquidation.

14

put IBRC into liquidation?

15

A.

13:13:01

Let's deal with this hybrid


Who put, who specifically

13:13:09
13:13:16
13:13:27
13:13:31

There was a special

16

liquidation order signed by the Minister

13:13:32

17

For Finance on the 7th of February which

13:13:35

18

appointed Mr. Wallace and Mr. Richardson

13:13:37

19

as joint special liquidators of IBRC.

13:13:40

In what capacity did the

13:13:43

minister put IBRC into liquidation?

13:13:45

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21

Q.

22

MR. WAXMAN:

23

answer.

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A.

25

Sorry.

Vague.

You can

13:13:50

The special

liquidation order was as part of section

1-800-325-3376

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4 of the IBRC Act that had been passed by

13:13:56

Parliament on, early in the morning of

13:14:00

the 7th of February.

13:14:03

Q.

13:14:04

I'm sorry I probably wasn't

13:14:08

clear with my question.

even a hybrid company into liquidation,

13:14:12

you must have some standing vis-a-vis

13:14:14

that company.

13:14:17

In order to put

In what capacity did the

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-- was the finance minister, was he a

13:14:19

11

shareholder, was he a creditor, what

13:14:22

12

capacity did he put the company into

13:14:24

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liquidation?

13:14:25

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A.

13:14:26

He was acting in the capacity

13:14:28

15

had a had been given to him under the

16

powers given by the IBRC Act itself.

17

I don't -- to answer your question, I

13:14:33

18

don't believe it was as a shareholder or

13:14:35

19

as a creditor.

13:14:36

20

finance minister as designated under the

13:14:40

21

terms of the IBRC Act.

13:14:43

22

It was in his role as the

MR. O'NEILL:

I reserve this

23

issue.

24

have a copy of the IBRC.

25

MR. WAXMAN:

1-800-325-3376

So

We will come back when I

Sure.

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13:14:45
13:14:47
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Q.

So in a creditor's winding up,

13:14:53

in any liquidation, what role do the

13:15:02

creditors play in that process, in a

13:15:05

normal, let's not talk about this act,

13:15:10

but in a normal Irish liquidation?

13:15:12

MR. WAXMAN:

Vague, calls for

13:15:15

Can you be a bit more

13:15:16

a narrative.

specific in what you're asking the

13:15:18

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witness?

13:15:20

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Q.

13:15:20

What is the position that the

12

creditors take vis-a-vis the company

13:15:21

13

after a company has either A shareholder

13:15:23

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resolution putting the company into

13:15:27

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liquidation or has applied to the court

13:15:29

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or a creditor has put the company into

13:15:31

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liquidation, the other creditors of the

13:15:34

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company?

13:15:37

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MR. WAXMAN:

Vague.

20

understand the question.

21

you --

22

A.

I don't
But if

13:15:40
13:15:41
13:15:42

I'm sorry, I don't quite

13:15:43

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understand whether you are talking about

13:15:44

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in the liquidation generally or you're

13:15:46

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talking about the actual procedure to

13:15:49

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place those into liquidation in the first

13:15:51

instance.

I just am not clear.

13:15:52

I'm talking about after the

13:15:54

4
5

Q.

company has been placed into liquidation.

13:15:56

A.

Okay.

13:15:57

Q.

Let's take a hypothetical

13:15:58

Oldco is placed

13:16:00

The creditors of Oldco

13:16:03

company, Newco or Oldco.

into liquidation.

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have what rights at that point under the

13:16:08

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law?

13:16:11

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MR. WAXMAN:

In which type of

13:16:11

13

liquidation are we referring to

13:16:13

14

with respect to the two that have

13:16:14

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been identified?

13:16:16

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Q.

A shareholder's and a court's?

13:16:17

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A.

Well first take a creditor's

13:16:20

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voluntary liquidation, and they can

13:16:22

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submit their claims to the liquidator as

13:16:24

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to what they claim to be owed by the

13:16:27

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company in liquidation and can go through

13:16:29

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that claims process with the liquidator

13:16:31

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in terms of that.

13:16:34

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25

And there is a procedure


whereby in a creditor's voluntary

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13:16:37

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liquidation there could be a committee of

13:16:40

inspection appointed at the creditors

13:16:42

meeting, which Mr. Wallace referred to,

13:16:47

when the company is placed into

13:16:49

liquidation.

13:16:51

inspection is typically made up of a

13:16:53

number of representatives of the creditor

13:16:56

group and a number of representatives of

13:16:59

the shareholder group.

13:17:01

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And that committee of

And in a committee of

11

13:17:02

12

inspection position, they would typically

13:17:04

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meet with the liquidator at various times

13:17:06

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during the liquidation.

13:17:09

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time but they have to meet every month or

13:17:12

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so, but that will be arranged with the

13:17:15

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liquidator.

13:17:17

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19

Q.

A.

There is no committee of

inspection in this case, correct.

22
23

And none of that is happening

in this case; is that correct?

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21

There's no set

Q.

Nor have the creditors met in

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1-800-325-3376

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13:17:20
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13:17:23
13:17:26

this case?

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13:17:17

MR. WAXMAN:

Well that lacks

foundation.

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2
3

Q.

Have the creditors met in this

13:17:30
13:17:32

case?

MR. WAXMAN:

Well they may

13:17:32

have met and he wouldn't know about

13:17:33

it.

13:17:35

Q.

But do you mean -No in terms of the structure

13:17:37

of the liquidation, have the creditors

13:17:39

met to approve the appointment of the

13:17:41

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liquidators?

13:17:44

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approve the appointment of the

13:17:45

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liquidators?

13:17:46

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A.

No.

13:17:47

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Q.

And why is that?

13:17:47

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MR. WAXMAN:

13:17:49

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speculation as phrased.

13:17:50

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Q.

13:17:52

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Have the creditors met to

Calls for

Is in fact that meeting

proscribed by the IBRC Act?

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A.

No, there's no provision of

13:17:55
13:17:59

20

the IBRC Act that says a creditor's

13:18:01

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meeting is to take place.

13:18:03

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23

Q.

A.

What I'm saying is there is no

provision within the IBRC Act which

1-800-325-3376

13:18:05
13:18:07

take place?

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Is to take place, is not to

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stipulates that a creditor's meeting

13:18:12

should take place when the company was

13:18:15

placed into liquidation.

13:18:16

Q.

5
6

I see.

So that's why there

was not a creditor's meeting?

13:18:18
13:18:20

A.

Yes.

13:18:22

Q.

And the same is true with the

13:18:22

9
10

committee of examination as you called

13:18:32

it?

13:18:34

A.

11

There is no provision within

13:18:35

12

the IBRC Act to appoint a committee of

13:18:37

13

inspection.

13:18:40

14
15

Q.

13:18:40
13:18:42

Okay.
A.

16
17

Committee of inspection.

In fact, sorry, just to

13:18:44
13:18:45

clarify.

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Q.

Yes.

13:18:46

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A.

In fact I think and without

13:18:47

20

looking at the --

13:18:48

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Q.

We will do that now.

13:18:49

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A.

-- I think that provision in

13:18:51

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respect of creditors voluntarily winding

13:18:52

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up the appointment of committee of

13:18:55

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inspection has been disapplied by the

13:18:57

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13:18:59

IBRC Act.

Q.

I believe that's correct, yes.

13:18:59

MR. O'NEILL:

13:19:00

I have here a

copy which we will put into --

13:19:01

thank you very much.

Mark this as

13:19:04

Traynor Exhibit 1.

Very efficient

13:19:07

that we have two copies.


(Traynor Exhibit 1 for

13:19:12
13:19:18

10

identification, document titled

13:19:18

11

"Exhibit B, Irish Bank Resolution

13:19:18

12

Corporation Act 2013.")

13:19:22

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MR. O'NEILL:

And this is

13:19:22

14

Traynor Exhibit 2 which is the

13:19:23

15

properly marked up copy of the

13:19:26

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Companies Act.

13:19:32

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(Traynor Exhibit 2 for

13:19:33

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identification, document, properly

13:19:26

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marked up copy of the Companies

13:19:27

20

Act.)

13:19:34

21

Q.

So why don't we focus on the

13:19:34

22

Companies Act marked up, because I think

13:19:38

23

that reflects the limitations of the IBRC

13:19:40

24

Act.

13:19:44

25

minute.

1-800-325-3376

We will get to the IBRC Act in a

13:19:46

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MR. WAXMAN:

So you're now

referring to Traynor Exhibit 2?

MR. O'NEILL:

Exactly, Traynor

13:19:46
13:19:47
13:19:49

Exhibit 2.

13:19:51

Q.

What other provisions that

13:19:59

would take place in the normal, let's

13:20:03

call it more standard liquidation have

13:20:06

been removed, are prohibited by the IBRC

13:20:12

10

Act pursuant to this markup of the

13:20:19

11

Companies Act?

13:20:21

12

MR. WAXMAN:

I'm going to

13:20:22

13

object to the term standard or

13:20:23

14

regular or normal because I'm not

13:20:24

15

sure that that term can be applied

13:20:26

16

to any liquidation.

13:20:28

17

asking the witness to answer what

13:20:30

18

are the differences between the act

13:20:32

19

that was put in place in 2013 and

13:20:35

20

the Companies Act, the witness can

13:20:39

21

answers that question.

13:20:42

22

MR. O'NEILL:

23

Q.

But if you're

Let me rephrase.

We have discussed the

13:20:42
13:20:45

24

committee of inspection and the creditors

13:20:49

25

committee as being eliminated by the IBRC

13:20:52

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13:20:58

Act.

What other provisions of a

Companies Act liquidation have been

13:21:02

eliminated by the IBRC Act?

13:21:05

Well section 10 of the IBRC

13:21:08

Act, which I have in front of me, sets

13:21:11

out a number of the provisions which have

13:21:13

been disapplied, and there is also

13:21:16

schedule 1 of the IBRC Act which sets out

13:21:20

certain amendments to the Companies Act.

13:21:22

A.

10

12

13:21:27

through each and every one of those.

13
14

13:21:25

So if you want I can go

11

Q.

Would you, please, I would

13:21:30

like to go through those.

15

A.

13:21:29

So there's section 205(a) and

13:21:31

16

section 206.1 have been disapplied.

13:21:34

17

Sections 212 to --

13:21:38

18

Q.

Sorry, can I just stop.

I'd

13:21:40

19

like to deal with not the section numbers

13:21:42

20

but the specific substance of the things

13:21:46

21

that have been disapplied, if we could.

13:21:49

22

In other words, if we start

13:21:53

23

with the Companies Act and we say, okay,

13:21:56

24

the jurisdiction of the High Court has

13:22:02

25

been removed by the IBRC Act, for

13:22:04

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13:22:07

example, this is section 212.


So the record is

13:22:09

clear, you're withdrawing the prior

13:22:10

question.

13:22:12

MR. WAXMAN:

MR. O'NEILL:

MR. WAXMAN:

Yes, I am.
And you're now

MR. O'NEILL:

13:22:13
13:22:14

posing a new question.

13:22:12

I'm asking a new

13:22:15

10

question.

13:22:16

11

Q.

13:22:16

I'm asking the question can we

12

go through the Companies Act with the

13:22:18

13

IBRC Act side by side and refer to the

13:22:22

14

Companies Act changes which have been

13:22:25

15

made by the IBRC legislation.

13:22:28

16

presume to all liquidations in Ireland,

13:22:32

17

except this one -- I'll ask a question,

13:22:36

18

sorry.

13:22:39

19

Because I

Are all liquidations in

13:22:39

20

Ireland, except this one, governed by the

13:22:42

21

Companies Act?

13:22:45

22
23

A.

Q.

Okay, fine.

So this

liquidation is governed by the Companies

1-800-325-3376

13:22:50
13:22:52

recollection, yes.

24
25

Yes, to the best of my

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Act as amended by the IBRC Act, yes?

13:22:58

A.

That's correct.

13:23:02

Q.

Okay, fine.

So what I'd like

13:23:03

to do is to go through the Companies Act

13:23:05

amendments and have you clarify, as an

13:23:08

experienced lawyer in this field, those

13:23:12

parts of a Companies Act liquidation

13:23:15

which are altered by the IBRC Act, the

13:23:17

10

substance of them, not the numbers.

13:23:22

11

Could we?

13:23:25

12
13

A.

Yes.

Where would you like to

13:23:26
13:23:27

start?

14

Q.

I'd like to start with 212.

13:23:28

15

A.

Yes.

13:23:31

Well 212 has been

16

disapplied in full, so the High Court

13:23:33

17

does not have jurisdiction to wind up

13:23:36

18

IBRC.

13:23:39

Is there anything else

13:23:39

20

in 212, the whole act, is there anything

13:23:42

21

else besides the restriction of the High

13:23:46

22

Court's role in this liquidation?

13:23:49

19

Q.

Okay.

23

A.

Not under 212.

13:23:51

24

Q.

Okay.

13:23:52

25

to 214.

1-800-325-3376

And let's move on then

13:23:57

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2
3

A.

in respect of the IBRC liquidation.

13:24:03
13:24:06

And the implications of that,

13:24:09

the meaning of that, the impact of that?

13:24:10

4
5

Yes, 214 has been disapplied

Q.

A.

Well, 214 sets out effectively

13:24:12

a definition as we call for insolvency

13:24:16

under the Companies Acts.

13:24:19

Q.

So the elimination of 214

13:24:21

10

removes the standard definition of

13:24:24

11

insolvency from application?

13:24:27

12

MR. WAXMAN:

I'll object to

13:24:30

13

the term standard.

14

has amended the provisions that

13:24:32

15

would otherwise apply with respect

13:24:34

16

to this particular statute.

13:24:36

17
18
19
20
21
22
23

The legislature

13:24:29

For this

13:24:39

particular liquidation only.

13:24:40

MR. O'NEILL:

MR. WAXMAN:

For the

13:24:42

particular statute.
MR. O'NEILL:

And not amended

13:24:43
13:24:44

Companies Act, yes.


MR. WAXMAN:

13:24:41

Well, they've

13:24:45

24

passed a statute and that statute

13:24:46

25

has the effect of amending the

13:24:47

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Companies Act.

13:24:49

Q.

13:24:54

And 215, the impact of the

13:25:01

elimination of section 215?


A.

215 refers to how someone can

13:25:03

present a petition to wind up the company

13:25:07

to the court, and that has been

13:25:10

disapplied.

13:25:12

Q.

9
10

And 216 relating to the powers

13:25:15

of the court?
A.

11

13:25:13

13:25:17

That is the powers of the

12

court in respect of a petition to wind up

13:25:18

13

the company.

13:25:21

14

Q.

And 217?

13:25:27

15

A.

217 which deals with the

13:25:30

That has been disapplied.

16

situation where proceedings which are

13:25:32

17

brought and between the time that a

13:25:35

18

winding up petition has been presented

13:25:39

19

and a winding up order has been made,

13:25:41

20

would be stayed, that has been

13:25:43

21

disapplied.

13:25:44

22

Q.

13:25:45

That has been disapplied.

23

Okay.

24

through 222 as a collective group.

25

is a commencement of the winding up by

1-800-325-3376

And we can deal I think with 220


This

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the court.

disapplication of those?

A.

What is the impact of the

13:26:06
13:26:09

Well that has been disapplied

13:26:11

in that the IBRC Act has made it clear

13:26:12

when IBRC went into liquidation.

13:26:14

Q.

13:26:16

Okay.

MR. WAXMAN:

And just so we're

13:26:17

clear, counsel, you're asking the

13:26:18

10

witness about those portions of the

13:26:20

11

act that have been amended, not

13:26:21

12

those portions of the act that

13:26:23

13

continue to apply.

13:26:24

14

MR. O'NEILL:

That's correct.

13:26:26

15

We will get to the ones that

13:26:28

16

continue to apply.

13:26:30

17

Q.

13:26:31

18

Section 225, appointment of a

13:26:44

liquidator.

19

A.

Yes, that has been disapplied.

13:26:45

20

Q.

And the effect of that?

13:26:49

21

A.

The effect of that is that it

13:26:50

22

is not the court who appoints the

13:26:52

23

liquidator to IBRC.

13:26:58

24
25

Q.

Does the court have any power

over the liquidator in IBRC?

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A.

Yes, I believe it does.

13:27:03

Q.

We will get to that in a

13:27:04

minute, where you believe it does.

13:27:06

Section 228?

13:27:11

A.

13:27:21

Yes, that is that -- the

procedure for notifying the making of the

13:27:25

winding up order has been disapplied.

13:27:28

Q.

9
10

court's power over the liquidators.


A.

11
12

Well 228 I believe deals with

Sorry, I was looking at

227(b), my apologies.

13

Q.

Yes.

228?

14

A.

Yes, that has been disapplied

13:27:31
13:27:33
13:27:35
13:27:37
13:27:39
13:27:40

15

in terms of a number of general

13:27:42

16

provisions.

13:27:44

17
18

Q.

Yes.

Does that remove the

court's jurisdiction over the liquidator?

13:27:45
13:27:48

19

A.

No, I do not believe it does.

13:27:51

20

Q.

And can you explain why you

13:27:53

21

don't believe it does?

22

A.

Because I think under section

13:27:55
13:27:56

23

280 of the Companies Act which has not

13:27:59

24

been disapplied the court still has a

13:28:01

25

role and can determine any question in

13:28:03

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respect of the liquidation by IBRC.

Q.

We will get to 280 shortly.


I note that the provisions of 229,

13:28:04
13:28:06
13:28:10

Okay.

with the exception of the removal of

13:28:17

court, remain intact.

13:28:20

Except when we get to section

13:28:27
13:28:36

231, 3 and 4.

that change?

13:28:39

A.

13:28:40

10

What is the implication of

The implication of that change

11

is that the liquidators do not have to

13:28:41

12

apply to court in order to seek their

13:28:44

13

sanction to exercise certain powers.

13:28:46

14

Q.

And --

13:28:50

15

A.

In the liquidation.

13:28:51

16

Q.

And who would they apply to if

13:28:53

17

not the court?

18

A.

19

anyone.

20

Q.

21

They don't have to apply to

13:28:55
13:28:55
13:28:57

So they have no obligation to

seek anyone's approval?

13:28:58
13:29:00

22

A.

Correct.

13:29:02

23

Q.

Let's view 232, 233, this gets

13:29:03

24

to, to the issue we just talked about in

13:29:12

25

the beginning, the committee of

13:29:15

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inspection, the committees of creditors.

13:29:16

The disapplication of these clauses does

13:29:25

what?

13:29:25

A.

It disapplies the rules for

13:29:27

appointment of a committee of inspection

13:29:29

in a court liquidation.

13:29:31

Q.

Okay.

So in the IBRC

13:29:32

liquidation there is no, pursuant to this

13:29:34

10

change, then, there is a disapplication

13:29:37

11

of the right of a creditors committee and

13:29:40

12

a committee of inspection?

13:29:43

13

A.

Yes.

There's no -- there's no

13:29:45

14

provision in the IBRC Act to appoint a

13:29:47

15

committee of inspection.

13:29:51

Q.

16

Could the liquidators if they

13:29:52

17

wished appoint the committee of

13:29:56

18

inspection?

13:29:58

I don't believe there's any

13:29:58

20

prohibition under the IBRC Act to that

13:30:00

21

happening.

13:30:02

19

A.

22
23

Q.

been stricken, the impact of that is?

24
25

234, powers of the court, has

A.

Can I just -- I just want to

read this.

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2
3

Q.

Certainly, of course, take

13:30:23

your time, absolutely.

A.

13:30:21

Just want to read this so I'm


This has taken out in a court

13:30:24
13:30:26

correct.

liquidation the ability to make an

13:30:36

application to court to annul the winding

13:30:37

up order which the court would have made.

13:30:39

So the implication of that is

13:30:41

10

that no one may actually -- whether it's

13:30:44

11

under 280 or any other clause, ask the

13:30:47

12

court to annul the order made by the

13:30:50

13

minister?

13:30:53

Q.

MR. WAXMAN:

15

the witness's testimony.

13:30:55

16

Q.

May anyone apply to

13:30:56

annul the order made by the minister?

13:30:59

17

Okay.

That misstates

13:30:54

14

18

A.

Yes, I believe they can.

13:31:01

19

Q.

And you do not -- does this

13:31:03

20

clause not -- does the elimination of

13:31:06

21

this clause not prevent that from

13:31:09

22

happening?

13:31:15

23

A.

No.

24

Q.

Let's move on.

25

13:31:15

There are lots

of modifications but I think they are

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fairly minor.

Let's move on to section

256, declaration of solvency.

13:31:24
13:31:47

A.

Yes.

13:31:51

Q.

What is the impact of the

13:31:52

13:31:53

elimination of section 256?


A.

Declaration of solvency is

13:31:56

required only in the case of a solvent

13:31:59

liquidation that is taking place and this

13:32:02

has been disapplied.

13:32:04

10

Q.

11
12

A.

That this is not a members

Q.

13:32:09
13:32:11

voluntary liquidation.

15

13:32:05
13:32:08

that is?

13
14

And the impact of disapplying

So can I clarify that that

13:32:13

16

means that the directors of the company

13:32:17

17

are not required to make a declaration of

13:32:20

18

solvency which they would ordinarily be

13:32:22

19

required to do?

13:32:25

20

A.

They are ordinarily required

13:32:26

21

to make a declaration of solvency only in

13:32:28

22

a members voluntary winding up.

13:32:31

23

instance, if this was a court

13:32:34

24

liquidation, the directors would not have

13:32:36

25

to file a declaration of solvency.

13:32:37

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So, for

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The provisions of 257 and the

13:32:46

following sections, which are applicable

13:32:50

to members winding up of a company, are

13:33:03

also not applicable under the act.

13:33:07

is the impact of that?

Q.

A.

7
8

What

Sorry, which particular just

13:33:11
13:33:12
13:33:14

so I'm --

Q.

I'm sorry.

13:33:15

10

A.

Sorry, just so --

13:33:16

11

Q.

257 and 258, 259.

13:33:18

12

A.

Yes, because this is not a

13:33:22

13

members voluntary winding up, then the

13:33:24

14

provisions of the Companies Act which

13:33:26

15

apply to a members voluntary winding up

13:33:29

16

have been disapplied.

13:33:31

17

Q.

So if it's not a members

13:33:32

18

voluntary winding up, then it's not a

13:33:36

19

court winding up, it's neither of those?

13:33:41

20

A.

A members voluntary winding up

13:33:45

21

is not supervised or done under the aid

13:33:47

22

of the court.

13:33:52

23

liquidation procedure.

24
25

Q.

It is an out of court

Right.

Is this liquidation

supervised by the court?

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A.

Any person can apply to the

13:34:02

court to seek any question or direction

13:34:04

in respect to this liquidation.

So I

13:34:07

would say yes, there is a supervisory

13:34:11

role for the court in this liquidation.

13:34:14

Q.

7
8

And how is that supervisory

13:34:18

role exercised?
MR. WAXMAN:

13:34:16

The witness just

13:34:22

10

testified to that.

13:34:23

11

Q.

13:34:23

12

No, how would the court

exercise that supervisory role?

13

A.

Any person could apply to the

13:34:25
13:34:27

14

court seeking the court to exercise its

13:34:28

15

role in respect of particularly section

13:34:31

16

280.

13:34:35

17
18

So if I can just turn to that.


Q.

Well I'll get to 280 in a

13:34:39

minute, please.

19

MR. WAXMAN:

13:34:36

Let the witness

13:34:39

20

answer the question, counsel.

13:34:40

21

Please, go ahead.

13:34:42

22

A.

13:34:43

Any person may apply to the

23

court to determine any question arising

13:34:43

24

in the winding up of IBRC.

13:34:45

25

can apply for that.

1-800-325-3376

So any person

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Q.

Let's deal with --

13:34:55

A.

Sorry, any creditor.

13:34:57

13:34:58

Apologize.
Q.

264 -- 261, sorry, 261.

This

13:35:00

eliminates, I might point out, the duty

13:35:03

of the liquidators to call creditors

13:35:08

meetings?

13:35:13

A.

No, 261, to be very clear,

13:35:13

10

deals with the situation where the

13:35:15

11

company has gone into a solvent voluntary

13:35:16

12

liquidation and that once the company has

13:35:20

13

gone into liquidation the liquidator then

13:35:23

14

forms the view that it in fact is not a

13:35:25

15

solvent liquidation and is rather an

13:35:28

16

insolvent liquidation and is there under

13:35:30

17

a duty to call the creditors meeting in

13:35:33

18

that instance.

13:35:35

19

Q.

I see.

13:35:35

20

A.

So that has been disapplied.

13:35:36

21

Q.

Now let me get back to Mr.

13:35:38

22

Wallace's statement this morning, that

13:35:41

23

the minister and the directors of the

13:35:44

24

statement of affairs stated that the bank

13:35:53

25

was solvent at the time just before it

13:35:54

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Mr. Wallace is of the

13:35:58

was liquidated.

opinion that the bank was insolvent

13:36:00

before it was liquidated.

13:36:03

-- this would then apply, had this not

13:36:05

been removed this would apply to exactly

13:36:10

such a circumstance, would it not?

13:36:12

MR. WAXMAN:

Wouldn't that

The question is

13:36:14

vague and ambiguous and as phrased

13:36:14

10

an improper attempt to impeach Mr.

13:36:18

11

Wallace collaterally.

13:36:21

12

you just rephrase the question and

13:36:23

13

ask this witness his view on

13:36:25

14

whatever it is that you're

13:36:26

15

inquiring about.

13:36:28

MR. O'NEILL:

16

So why don't

I will attempt

13:36:31

17

to do so.

13:36:32

18

Q.

13:36:33

This clause would apply where

19

a company that was solvent is put into

13:36:42

20

liquidation and the liquidators formed

13:36:49

21

the opinion that the company was

13:36:50

22

insolvent after being appointed.

23

correct?

24
25

A.

Is that

13:36:55

This section would apply if a

declaration of solvency had been sworn by

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the directors under section 256 and the

13:37:00

liquidator then forms the view that the

13:37:05

company would not be able to pay its

13:37:07

debts in full.

13:37:09

In this instance, there was

13:37:10

never a declaration of solvency sworn at

13:37:12

any time by any person or any director.

13:37:16

Q.

And why was that declaration

13:37:18
13:37:19

10

of solvency not sworn?

11

MR. WAXMAN:

12

speculation as phrased.

13:37:23

13

Q.

13:37:24

Calls for

Well, I'm sorry, we just

13:37:22

14

covered that and declaration of solvency

13:37:26

15

under 258 -- sorry, under 256 is

13:37:28

16

eliminated, the requirement for such a

13:37:34

17

declaration is eliminated by the statute?

13:37:36

18

A.

That's correct.

Because the

13:37:39

19

statute has set out the provisions under

13:37:40

20

which IBRC was to be liquidated.

13:37:43

21

Q.

I understand.

So there was

13:37:46

22

not a direct declaration of solvency in

13:37:49

23

this case because the statute declared

13:37:53

24

that there shouldn't be one, correct?

13:37:55

25

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A.

Yes, because it was not a

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13:38:00

members voluntary winding up.


So what are the protections of

13:38:03

Q.

section 261?

these protections in 261 in a situation

13:38:10

where a presumably solvent company is

13:38:12

determined to be insolvent?

13:38:16

clause in the Companies Act?

What is the purpose for

Why is this

13:38:06

13:38:20

Because for the company to be

13:38:22

10

solvent and having sworn the declaration

13:38:24

11

of solvency creditors can take comfort

13:38:27

12

their debts will be paid in full.

13:38:32

A.

13

If the liquidator now forms

13:38:33

14

the view that will not be the case, he is

13:38:35

15

under the duty to inform them that that

13:38:37

16

is not the case so that they are aware

13:38:39

17

that their debts will not be paid in

13:38:41

18

full.

13:38:43

19

Q.

Except --

13:38:44

20

A.

So it is to protect the

13:38:45

21

creditor's, sorry, it's to protect the

13:38:46

22

creditor's interest.

13:38:48

23
24

Q.

Except in this case there is

no requirement to so inform creditors?

25

1-800-325-3376

MR. WAXMAN:

That misstates

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the record, counsel, because

13:38:56

there's been testimony in the case

13:38:58

that the company was not solvent so

13:39:00

this provision would not apply in

13:39:02

any instance.

13:39:04

you're trying to establish through

13:39:07

the way you phrased the question.

13:39:09

So I'm not sure what

MR. O'NEILL:

Let me ask a

13:39:11

10

different question.

11

question, let me ask a different

13:39:14

12

question.

13:39:17

13

Q.

13:39:18

14

Withdraw that

13:39:10

Have you read the statement of

13:39:19

affairs?

15

A.

Yes.

13:39:20

16

Q.

Do the directors in the

13:39:20

17

statement of affairs declare that on the

13:39:21

18

6th of February the company was solvent?

13:39:25

19
20

A.

Yes, I believe that is the

13:39:31

case.

21

13:39:29

Q.

Do you believe that is true?

13:39:32

22

Can you form an opinion as to the

13:39:34

23

veracity of that statement?

13:39:35

24
25

1-800-325-3376

MR. WAXMAN:

Which, that the

directors?

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Q.

That the company was solvent?

13:39:40

MR. WAXMAN:

13:39:42

Okay.

So is he

of the view that the company is

13:39:43

solvent --

13:39:44

MR. O'NEILL:

MR. WAXMAN:

Yes.
-- regardless of

what the directors' views may be.


MR. O'NEILL:

9
10

A.

Yes.

From what I am aware of having

13:39:45
13:39:45
13:39:46
13:39:49
13:39:50

11

looked at the documents afterwards and

13:39:51

12

from discussions I have had with the

13:39:54

13

special liquidators, I do not believe

13:39:57

14

that is the case.

13:39:59

15

February I believe the company was

13:40:01

16

insolvent.

13:40:02

Sorry, on the 7th of

17

Q.

6th of February?

13:40:03

18

A.

6th, I haven't examined --

13:40:03

19

Q.

The day the directors were

13:40:05

20

13:40:07

dismissed?

21

A.

The directors --

13:40:08

22

Q.

The directors were dismissed

13:40:09

23

at 4:25 p.m. on the 6th.

13:40:11

24

A.

That's incorrect.

13:40:14

25

Q.

The statement of affairs state

13:40:15

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so.

statement of affairs.

13:40:16

The directors state so in the

13:40:18

And I believe, I'm sorry, I

13:40:19

don't mean to impeach anyone, but Mr.

13:40:21

Wallace says he was appointed on the 6th.

13:40:23

A.

That's incorrect.

Mr. Wallace

13:40:27

said that at approximately 7:40 on the

13:40:28

7th of February he, himself and Mr.

13:40:31

Richardson were appointed.

13:40:34

10

Q.

11
12

Can you tell me when the prior

13:40:38

directors of IBRC were dismissed?

13

A.

13:40:35

They would have been dismissed

13:40:40
13:40:42

14

on the appointment of the special

15

liquidators on the 7th of February.

16

were most of the directors were informed

13:40:46

17

on the 7th of February that their

13:40:49

18

contracts of employment were terminated.

13:40:52

19

Q.

They

So we have a difference of

13:40:44

13:40:56

20

opinion between the statement of affairs

13:40:58

21

and yourself?

13:41:00

22
23

A.

Q.

Okay, that's fine.

Can we

agree that all of the subsequent

1-800-325-3376

13:41:02
13:41:05

know to be a fact.

24
25

I can only tell you what I

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provisions up to 280 deal with, and you

13:41:39

can look at them, deal with the exclusion

13:41:44

of the normal role of creditors meetings

13:41:47

and, et cetera, in this particular

13:41:54

liquidation?

13:41:58

MR. WAXMAN:

Same objection to

13:41:59

the term normal.

13:42:00

A.

13:42:03

They disapplied the provisions

10

which apply in creditors voluntary

13:42:06

11

winding ups in terms of the holding of

13:42:10

12

meetings and, for instance, under section

13:42:13

13

266 and other provisions applicable to

13:42:16

14

creditors voluntary winding up, on the

13:42:18

15

basis that this liquidation was not a

13:42:21

16

creditors voluntary winding up.

13:42:24

17

Q.

Okay.

Let's turn to the

13:42:33

18

famous section 280.

19

language of section 280 has been

13:42:39

20

modified.

13:42:43

21

implications of that modification are?

22

A.

You'll note that the

13:42:26

Can you tell us what the

13:42:45

The modification is the first

13:43:00

It's two-fold, if I can say that.

13:43:01

23

part.

24

So first part is that the special

13:43:04

25

liquidator or any creditor can apply to

13:43:07

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the court to determine any question, and

13:43:10

that secondly the special liquidator can

13:43:12

apply to the court to exercise all or any

13:43:15

of the powers which the court might

13:43:18

exercise if it was a court liquidation.

13:43:19

Under the stand -- I don't

13:43:24
13:43:26

want to use the word stand.

typical court liquidation, any creditor

13:43:28

10

or contributory could apply to the court

13:43:31

11

in respect of the exercise of any powers.

13:43:36

12

But that has been modified so that it is

13:43:38

13

just the special liquidator who can apply

13:43:40

14

under that second limb of the section.

13:43:43

15

Q.

Under a

So it limits some rights of

13:43:47

16

creditors under section 280 of the

13:43:50

17

Companies Act?

13:43:52

18

A.

It limits in respect of the

13:43:53

19

exercise of any of the powers which the

13:43:57

20

court might exercise.

It doesn't limit

13:43:59

21

the ability of the creditor to apply to

13:44:02

22

court to determine any question in

13:44:05

23

respect of the liquidation.

13:44:08

But it does limit the

13:44:09

right of creditors to apply to the court

13:44:11

24
25

Q.

1-800-325-3376

Right.

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to exercise powers of the court, it

13:44:15

restricts that privilege to the special

13:44:20

liquidators?

13:44:22

A.

It takes that provision, yes.

13:44:23

Q.

And secondly, can you opine on

13:44:25

the meaning of the revised section 280.1,

13:44:30

specifically the language that says to

13:44:41

determine any question arising in the

13:44:44

10

winding up of IBRC within the meaning of

13:44:46

11

the Irish Bank Resolution Corporation

13:44:51

12

Act, okay, what is -- is there a

13:44:55

13

limitation placed on this application by

13:44:59

14

the meaning of the Irish Bank Resolution?

13:45:01

15

MR. WAXMAN:

I'm sorry,

13:45:03

16

counsel, you mentioned section 281.

13:45:04

17

Did I hear you correctly?

13:45:06

18

MR. O'NEILL:

19

MR. WAXMAN:

20

Q.

No, 280.1.
Thank you.

280.1 puts a clause in arising

13:45:09
13:45:11
13:45:12

21

in the winding up of IBRC within the

13:45:15

22

meaning of the Irish Bank Resolution

13:45:17

23

Corporation Act.

13:45:20

24
25

Does that parenthetical remark


have any import?

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A.

In my view, no.

I think it is

13:45:29

there solely that the winding up of IBRC

13:45:31

is as defined in the Irish Bank

13:45:34

Resolution Corporation Act 2013.

13:45:40

Q.

And the implication of the

13:45:41

change in 180, section 2, other than an

13:45:49

order annulling the making of the special

13:46:04

liquidation order?

13:46:06

10

A.

Yes.

13:46:07

11

Q.

That means?

13:46:08

12

A.

The court may make any order

13:46:09

13

other than annulling the liquidation

13:46:14

14

order that has been made on the 7th of

13:46:16

15

February.

13:46:19

Q.

16
17

So the court may not reverse

the liquidation of IBRC?

18

A.

The court under that section

13:46:19
13:46:22
13:46:27

19

cannot annul the making of the order that

13:46:29

20

had been made.

13:46:30

And it took out,

13:46:32

22

interestingly, 280 section 4 which are

13:46:38

23

the penalties on the company for

13:46:43

24

disobeying an order made under 280?

13:46:51

21

Q.

25

1-800-325-3376

A.

Under 280 subsection 3, which

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is that an office copy of an order

13:46:57

annulling the resolution has to be

13:47:00

forwarded to the registrar of companies

13:47:02

for registration.

13:47:04

says if a company fails to comply with

13:47:07

that.

13:47:09

And section 284 which

Q.

Right, understood.

13:47:10

A.

-- there is an offense

13:47:11

10

13:47:13

created.
Q.

11

And this is because the order

13:47:13

12

cannot be reversed by the court under

13:47:14

13

section 280.2 the modification to 280.2?

13:47:17

14

A.

That's correct.

13:47:22

15

Q.

Now 282 and 282(a) have both

13:47:23

16

been eliminated.

17

that?

What is the impact of

13:47:35
13:47:38

282 first off is that -- 282

13:47:38

19

refers to a voluntary winding up of the

13:47:55

20

company so it doesn't refer to a court

13:47:57

21

winding up and simply says that the

13:47:59

22

voluntary winding up of the company shall

13:48:01

23

not bar the right.

13:48:03

24

creditor's voluntary winding up, a

13:48:06

25

creditor still has the right to apply to

13:48:09

18

A.

1-800-325-3376

So in a particular

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the court if they wish to convert the

13:48:12

creditors voluntary winding up into a

13:48:13

court winding up.

13:48:13

Q.

Right.

13:48:13

A.

That has been disapplied

13:48:16

because this is not a voluntary creditors

13:48:18

winding up.

13:48:20

terms of the inspection by the director

13:48:23

10

of corporate enforcement who is the

13:48:25

11

director that is defined, making an order

13:48:28

12

for -- allowing him to inspect the books

13:48:33

13

and papers.

13:48:35

14

Q.

282(a) is disapplied in

So that the director of

13:48:36

15

corporate enforcement does not have the

13:48:38

16

power to, in this case to inspect the

13:48:40

17

books and papers of the company?

13:48:43

MR. WAXMAN:

19

a voluntary winding up.

13:48:46

20

Q.

13:48:53

21

Because it's not

13:48:45

18

Let's move on to section 286.

13:49:09

Okay?

22

A.

Yes.

13:49:10

23

Q.

Antecedent transactions?

13:49:10

24

A.

Yes.

13:49:13

25

Q.

The Central Bank on the 18th

13:49:13

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of October took out a charge over the

13:49:20

assets of IBRC.

13:49:26

Are you aware of that?

A.

Yes.

13:49:29

Q.

Are you aware of the

13:49:29

circumstances of that charge, why they

13:49:34

took out that charge?

13:49:36

MR. WAXMAN:

As to why calls

13:49:40

for speculation.

9
10

13:49:38

MR. O'NEILL:

Well, if he is,

13:49:42

11

I'm asking if he's aware of one.

13:49:43

12

A.

13:49:45

I have read the charge and so

13

I have read what's in the charge, plus

13:49:47

14

and I wasn't present when the charge was

13:49:51

15

being taken.

13:49:54

16

Q.

13:49:56

17

13:49:57

that?

18
19

So you have no knowledge of

A.

I have no first time

13:49:58

knowledge.

20

13:49:57

MR. WAXMAN:

This is how it

13:49:59

21

works.

He has to wait until you're

13:49:59

22

done answering a question before he

13:50:01

23

poses another one, and you have to

13:50:02

24

wait to answer a question until

13:50:04

25

he's done posing it.

13:50:07

1-800-325-3376

Because the

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reporter cannot take down two

13:50:10

people speaking at the same time.

13:50:11

Perhaps these reporters can.

13:50:13

MR. O'NEILL:

MR. WAXMAN:

This one can.

13:50:14
13:50:15

But most

reporters can't.

So wait and make

13:50:16

sure he's done asking his question

13:50:19

before you start to answer.

13:50:21

The

10

best way to do that is to pause and

13:50:22

11

make sure he's actually finished.

13:50:24

12

Q.

13:50:28

Do you have any knowledge at

13

all of any of the transactions that took

13:50:30

14

place regarding the promissory notes and

13:50:35

15

the charge taken by the Central Bank?

13:50:38

16

The issuance of the promissory notes

13:50:45

17

first, do you have any knowledge of the

13:50:47

18

issuance of the promissory notes by the

13:50:48

19

Irish government to IBRC, to Anglo?

13:50:51

20
21

A.

No, I do not have any

knowledge of that.

22

Q.

And do you have any knowledge

13:50:54
13:50:55
13:50:56

23

at all about why or who instructed or who

13:50:59

24

informed or asked the bank to, in

13:51:03

25

addition to the collateral provided by

13:51:09

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the promissory notes to also make a

13:51:12

charge to the Central Bank over the

13:51:15

assets of IBRC?

13:51:18

A.

No, I'm not aware of that.

13:51:19

Q.

In a Companies Act, so we can

13:51:21

avoid the word normal, in a Companies Act

13:51:27

liquidation, if there was a suspicion

13:51:29

that the party taking the charge was

13:51:36

10

aware that the company was going to be

13:51:40

11

liquidated, what would be the implication

13:51:44

12

of that charge taken within six months of

13:51:48

13

the liquidation?

13:51:51

14

Incomplete

13:51:52

You can answer, if

13:51:53

MR. WAXMAN:

15

hypothetical.

16

you can.

13:51:55

17

A.

13:51:56

Well, I think what you're

18

saying would -- that a liquidator would

13:51:59

19

look at the charge that was taken in

13:52:03

20

place to see whether it was a fraudulent

13:52:06

21

preference within the meaning of section

13:52:09

22

286.

13:52:11

23

Q.

And what is a fraudulent

13:52:11

24

preference within the meaning of section

13:52:13

25

286?

13:52:15

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It is a charge or security put

13:52:15

in place which has the intention to favor

13:52:17

one creditor over another.

13:52:23

A.

Have you examined the -- in

13:52:24

your role in the liquidation, have you

13:52:26

examined the charge put in place by the

13:52:28

Central Bank in October of 2012 to make a

13:52:30

determination that the nature of -- is

13:52:35

that charge a fraudulent charge?

13:52:38

Q.

10
11

A.

No, I have not.

12

Q.

You have not.

13

13:52:39

Has anyone

13:52:40
13:52:42

asked you to do that?

14

A.

No, I have not.

13:52:43

15

Q.

So you --

13:52:45

16

A.

Plus --

13:52:46

17

Q.

You are not the legal advisor

13:52:47

18

13:52:48

--

19

MR. WAXMAN:

He's not done

13:52:49

20

answering.

13:52:50

21

Q.

Sorry.

13:52:51

22

A.

I have not done so because

13:52:52

23

under the terms of section 12.3 of the

13:52:53

24

IBRC Act the special liquidator cannot

13:52:57

25

challenge that charge put in place as a

13:52:59

1-800-325-3376

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MARK TRAYNOR
13:53:01

fraudulent preference.

Q.

I see.

Well good, because

13:53:02

that's where we were going next, okay?

13:53:04

What does the effect of the transfer of

13:53:09

that charge to NAMA have upon the ability

13:53:11

of anyone to challenge that charge?

13:53:16

MR. WAXMAN:
Q.

Vague.

Well, let's get to -- this is

13:53:19
13:53:21

10

where we get into the section 12 of the

13:53:23

11

IBRC Act which you just referred to.

13:53:27

12
13

A.

Can I just check are we

finished with the Companies Act?

13:53:32
13:53:33

14

Q.

What?

13:53:35

15

A.

Are we finished with the

13:53:37

16
17
18

13:53:40

Companies Acts?
Q.

No, not yet, but we will get

13:53:43

back to it.

19

MR. WAXMAN:

20

13:53:41

Before you ask

another question, counsel.

13:54:22
13:54:23

(Counsel and witness confer.)

13:54:53

The meaning of section 12.3 of

13:54:53

23

the IBRC Act which you've alluded to, can

13:54:59

24

you describe what the effect of that

13:55:03

25

clause is?

13:55:05

21
22

Q.

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Well it's that any obligation

13:55:15

incurred, security created, payment made

13:55:18

or performed by IBRC in favor of the

13:55:19

bank, and the bank is defined as the

13:55:22

Central Bank of Ireland, and shall be

13:55:23

taken to be valid and enforceable in all

13:55:27

respects, and the validity and

13:55:29

enforceability may not be challenged by

13:55:32

10

any person including a special liquidator

13:55:34

11

and shall not be invalidated or rendered

13:55:37

12

void or voidable as against the bank, by

13:55:41

13

any of the various sections there, A, B,

13:55:43

14

C, D, E, F, G of section 212.3.

13:55:46

A.

15

Q.

So basically it eliminates the

13:55:56

16

effect of section 286 of the Companies

13:55:58

17

Act, correct?

13:56:02

18

A.

It limits it, but a creditor

13:56:03

19

can still challenge the provisions of

13:56:07

20

that section as being unconstitutional if

13:56:09

21

they believe that it affects their

13:56:12

22

rights.

13:56:14

23

Q.

24

We will get to that, the

constitutionality.

25

1-800-325-3376

But in terms of other than a

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challenge of constitutionality, it seems

13:56:21

pretty pervasive, this section, in terms

13:56:25

of its restriction of any right to

13:56:28

challenge the actions of the security

13:56:32

given or taken with regard to the assets

13:56:39

by IBRC or the Central Bank?

13:56:42

MR. WAXMAN:

argument or a question?

10

MR. O'NEILL:
Q.

11

13:56:44

Is that an

13:56:45

It's a question.

I mean it's pretty pervasive,

13:56:46
13:56:47

12

pretty much covered everything from ultra

13:56:50

13

vires to fraudulent preference; is that

13:56:54

14

correct?

13:56:54

15
16

A.

It does, but it's a provision

of the act that Parliament implemented.

13:56:56
13:56:57

So let's

13:56:59

I think we're pretty much

13:57:02

17

Q.

18

get on then.

19

finished with the Companies Act I wanted

13:57:07

20

to deal with.

13:57:10

21

I understand that.

13:57:16

Actually the only issue I


wanted to deal with is section 301.

23

is the implication of section 301, the

13:57:37

24

impact -- 301(a), I'm sorry.

13:57:40

25

1-800-325-3376

A.

What

13:57:18

22

Is that in respect of a

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creditors meeting which takes place as

13:57:52

part of a creditors voluntary winding up,

13:57:53

if there is a potential conflict of

13:57:56

interest that would be disclosed to the

13:57:58

meeting.

13:58:00

creditors voluntary winding up.

8
9

Q.

But that is in the context of a

13:58:03

Which we've established this

is not a creditors voluntary winding up?

13:58:06
13:58:07

10

A.

That is correct.

13:58:10

11

Q.

All right.

13:58:12

12

The rest is not

13:58:18

particularly important.

13

13:58:25

Let's talk about


constitutional law for a moment.

15

has been raised in your revised statement

13:58:31

16

and several times in the past.

13:58:36

17

This

13:58:27

14

Can you explain, first off,

13:58:38

18

who has the right to challenge the

13:58:41

19

constitutionality of an Irish law?

13:58:46

20

A.

Any person.

13:58:49

21

Q.

Any person, a Frenchman, a

13:58:50

German, a Greek?

23

challenge the rights of -- challenge the

13:58:56

24

constitutionality of an Irish law?

13:58:59

25

MR. WAXMAN:

1-800-325-3376

Can a Greek citizen

13:58:53

22

I understand

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you're a lawyer, of course.

If you

13:59:03

are not an expert on constitutional

13:59:05

law, you might want to make that

13:59:08

clear in your answers.

13:59:09

extent you feel qualified to answer

13:59:13

the particular question, you should

13:59:15

do so.

13:59:16

A.

But to the

I don't know the answer as to

13:59:17

10

whether a Greek person can, can challenge

13:59:19

11

or not.

13:59:22

12

knowledge of that.

I don't have sufficient

13:59:24

So you don't know whether a

13:59:25

14

person who is not Irish has a right to

13:59:29

15

challenge an Irish statute under the

13:59:31

16

Irish constitution?

13:59:35

13

Q.

17

A.

I'm not aware of that.

13:59:36

18

Q.

If one were to challenge the

13:59:38

19

statute, how would one go about it?

20

MR. WAXMAN:

21

Q.

Vague.

Let me say as an attorney, to

13:59:40
13:59:43
13:59:46

22

challenge the constitutionality of an

13:59:50

23

Irish, piece of Irish legislation, how

13:59:52

24

does one proceed?

13:59:58

25

1-800-325-3376

A.

One typically proceeds by

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issuing proceedings against Ireland and

14:00:01

the attorney general.

14:00:03

general is the office which typically

14:00:05

drafts the legislation in question and

14:00:08

would be the legal advisor to the

14:00:10

government.

14:00:13

The attorney

14:00:14

Q.

which court?

14:00:17

10

A.

The High Court.

14:00:18

11

Q.

And the High Court will then

14:00:20

12

Okay.

And that is filed in

decide that issue?

14:00:25

13

A.

Yes.

14:00:26

14

Q.

And are there provisions in

14:00:26

15

The Irish Bank Resolution Act relating to

14:00:31

16

challenges of the constitutionality of

14:00:33

17

the act?

14:00:35

18
19

A.

Sorry, I don't quite

understand your question.

14:00:38
14:00:40

In challenging the application

14:00:41

21

of the act, are there restrictions on the

14:00:43

22

court's consideration of such challenges

14:00:47

23

in the act?

14:00:53

20

Q.

24

A.

I am not aware of that.

14:00:54

25

Q.

Bear with me for one second.

14:01:02

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Can I refer you to section 8 on page 9 of

14:01:19

the act.

14:01:26

A.

Yes.

14:01:27

Q.

Now this deals with injunctive

14:01:33

relief, not a constitutional challenge.

14:01:35

But I presume this would be a challenge

14:01:38

under section 280 of the act.

14:01:40

MR. WAXMAN:

9
10

MR. O'NEILL:

Now I'm confused.


I'm sorry.

I'm

going backwards, I apologize.

11
12

MR. WAXMAN:

13

constitutionality?

14

MR. O'NEILL:

Are we out of

14:01:42
14:01:44
14:01:45
14:01:46
14:01:47

No, we're not

14:01:48

15

out of constitutionality yet.

14:01:49

16

Q.

14:01:51

17

section 280.

18

section 280 may be brought, as you point

14:01:56

19

out, I believe, by the special

14:01:58

20

liquidators or by any creditor?

14:02:02

I want to go back to the


A case brought under

14:01:54

21

A.

That's correct.

14:02:03

22

Q.

Fine.

14:02:04

In bringing such a

23

case, what is the application of section

14:02:06

24

8 of the IBRC Act?

14:02:11

25

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A.

The application of section 8

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only applies where injunctive relief is

14:02:14

being sought as part of those

14:02:17

proceedings.

14:02:18

not being sought as part of the

14:02:20

proceedings, section 8 has no relevance

14:02:22

whatsoever.

14:02:24

Q.

So if injunctive relief is

But if I am attempting to

14:02:25

compel the special liquidator to doing

14:02:27

10

something or prevent him from doing

14:02:33

11

something, section 8 would apply?

14:02:35

12

A.

If you issue proceedings in

14:02:37

13

which you're seeking injunctive relief,

14:02:38

14

yes, section 8 would apply.

14:02:40

15

not be the case that every application

14:02:44

16

under section 280 that may be brought

14:02:45

17

would involve injunctive relief.

14:02:48

But it may

18

So it's not -- it doesn't flow

14:02:50

19

that it has to involve injunctive relief.

14:02:52

20

Q.

I understand.

You're an

14:02:56

21

experienced attorney.

22

-- again, you have a background in

14:02:58

23

liquidations.

14:03:00

24

of a liquidator to do something,

14:03:02

25

liquidate an asset, value an asset, do

14:03:08

1-800-325-3376

If in challenging

14:02:55

In challenging the actions

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something, can you give me an estimate,

14:03:10

an idea of what other kinds of actions

14:03:15

would be taken to restrain or force the

14:03:18

liquidator to do something other than

14:03:21

injunctive relief?

14:03:23

A.

No.

If you're looking to

14:03:25

restrain the liquidator from doing

14:03:28

something, then obviously injunctive

14:03:30

relief would be the primary way to do it.

14:03:32

10
11

Q.

How about to compel him?

14:03:34

12

A.

You could seek a mandatory

14:03:36

13

injunction to force him to do something,

14:03:38

14

yes.

14:03:41

15
16

Q.

So in all of those cases

injunctive relief would be sought?

14:03:41
14:03:45

If you're seeking to either

14:03:46

18

restrain or force the liquidator to do

14:03:48

19

something, yes.

14:03:52

17

A.

20
21

Q.

And what is the implication of

section 8 as to injunctive relief?

14:03:54
14:03:55

Section 8 sets out a

14:03:58

23

limitation on the part to grant

14:04:03

24

injunctive relief in that a court when

14:04:05

25

looking at the normal test for applying

14:04:08

22

A.

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an injunction would also have to take

14:04:09

into account the public interest.

14:04:11

4
5

Q.

And the public interest is,

14:04:13
14:04:15

what does that mean?

A.

It's not defined.

14:04:16

Q.

Public interest strikes me as

14:04:24

defined as the purposes of this act.


A.

I see it says in considering

14:04:27
14:04:30

10

the public interest the court shall have

14:04:31

11

regard to the purpose of the act, yes.

14:04:35

12
13

Q.

And the purposes of this act

14:04:37

are?

14

14:04:36

A.

To -- well there's, they're

14:04:38

15

set out at the start of the act so rather

14:04:41

16

than seek to summarize, they are to

14:04:43

17

provide for the orderly winding up of the

14:04:46

18

affairs of IBRC, to help address the

14:04:47

19

serious disturbance in the economy and to

14:04:50

20

maintain the functioning of IBRC to

14:04:55

21

support the financial stability of the

14:04:57

22

state and to support the stability of the

14:04:58

23

Irish financial system.

14:05:00

24

at the start.

25

1-800-325-3376

Q.

They are set out

Yes, I understand.

14:05:03

Have there

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been any attempts under section 280, to

14:05:08

your knowledge, to seek injunctive relief

14:05:12

against the special liquidators?

14:05:14

A.

There have been no

14:05:17

applications that I am aware of under

14:05:18

section 280.

14:05:20

applications brought under section 6 of

14:05:23

the act to issue proceedings against the

14:05:26

10

special liquidators in which injunctive

14:05:27

11

relief has been set out as one of the

14:05:30

12

reliefs being sought, and there has also

14:05:33

13

been an application in existing

14:05:36

14

litigation that was in being before the

14:05:39

15

liquidation in which an injunction was

14:05:42

16

sought and that is -- currently judgment

14:05:45

17

is reserved on that.

14:05:49

18

Q.

There have been

I understand.

Are there any

14:05:50

19

cases -- have any cases been brought

14:05:51

20

under section 280 against the special

14:05:54

21

liquidators?

14:05:57

22

A.

No, not that I'm aware of.

14:05:57

23

Q.

So there are no cases pending

14:05:59

24

against the special liquidators, there's

14:06:02

25

no cases?

14:06:04

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There's no cases under section

14:06:04

There are cases against the special

14:06:06

A.

280.

liquidators and the company in special

14:06:07

liquidation.

14:06:10

Q.

And what are those?

14:06:10

What

provisions of the law are those cases

14:06:13

brought under?

14:06:15

A.

14:06:16

Well, for instance, I'm

10

referring to cases which have been, where

14:06:20

11

applications have been brought under

14:06:23

12

section 6 to issue proceedings against

14:06:24

13

the bank in special liquidation.

14:06:26

14

don't necessarily refer specifically to

14:06:28

15

section 280 but they would be seeking

14:06:30

16

different reliefs against the company in

14:06:32

17

special liquidation.

14:06:35

18
19

Q.

They

And what other provisions can

14:06:39

they seek such relief under?

20

A.

21

of contract.

22

performance.

23

Well, they could claim breach


They can claim specific

different reliefs depending on it.

25

are certain borrowers who would be

1-800-325-3376

14:06:41
14:06:43
14:06:46
14:06:46

There is a variety of

24

14:06:37

There

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claiming misrepresentation and fraud by

14:06:54

the bank prior to liquidation.

14:06:56

there's cases that are, that were ongoing

14:06:59

that have been continued post the 7th of

14:07:02

February.

14:07:04

Q.

I see.

So

But after the 7th of

14:07:04

February you're aware of no cases brought

14:07:06

against the bank under the Companies Act?

14:07:09

10

A.

No.

What I'm saying is and to

14:07:12

11

be clear is I am not aware of any cases

14:07:15

12

which specifically seek directions of the

14:07:17

13

court under section 280 of the Companies

14:07:20

14

Act.

14:07:25

15

MR. WAXMAN:

If you're going

14:07:25

16

to switch topics, why don't we take

14:07:26

17

our first break.

14:07:27

18

MR. O'NEILL:

Sure.

14:07:29

19

(A recess was had.)

14:07:30

On the issue of constitutional

14:20:43

21

law, so if we go back, a plaintiff brings

14:20:51

22

a case in the High Court, correct?

14:21:03

20

Q.

23

A.

Correct.

14:21:08

24

Q.

Against the attorney general?

14:21:09

25

A.

And Ireland.

14:21:11

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Q.

And Ireland.

And what are the

14:21:12

criteria for the High Court in deciding

14:21:18

that case?

14:21:20

A.

I wouldn't be an expert in

14:21:22

constitutional law so I don't know what,

14:21:24

what are the tests that they look at.

14:21:27

Q.

And if the High Court decides

14:21:29

that the law is -- this is all very

14:21:33

10

hypothetical.

14:21:35

11

constitutional challenges to the IBRC?

Have there been any

14:21:37
14:21:39

12

A.

No.

13

Q.

There have not been.

In your

14:21:40

14

view, how long does a -- do you have any

14:21:43

15

knowledge of how long a constitutional

14:21:46

16

challenge may take?

14:21:48

17

A.

I think it varies as to the

14:21:51

18

particular act in question, as to the

14:21:54

19

particular sections of the act that

14:21:57

20

people are seeking to have a

14:21:58

21

constitutional view on.

14:22:00

22

am aware of one case last year where a

14:22:02

23

terminally ill lady sought to challenge

14:22:07

24

and that was heard within three weeks or

14:22:13

25

four weeks.

14:22:15

1-800-325-3376

For instance, I

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So the courts do try and

14:22:18

facilitate challenges.

show extreme urgency, they usually

14:22:21

facilitate them with an early hearing

14:22:23

date.

14:22:25

7
8
9

Q.

Others can take a lot longer.

14:22:26

I'm actually familiar with

14:22:28

that case, very, actually, intimately.

10
11

And if people can

14:22:15

In that case, the High Court


ruled against the challenger?

14:22:30
14:22:35
14:22:39

12

A.

Yes.

14:22:42

13

Q.

And the case went to the

14:22:43

14

Supreme Court?

14:22:45

15

A.

I'm aware of that.

14:22:46

16

Q.

Yes.

14:22:47

17

A.

Yes.

14:22:48

18

Q.

And the Supreme Court has not

14:22:49

19

decided that case; is that correct?

20
21

A.

decided that case.

22
23

No the Supreme Court has

Q.

That's right, they did decide.

So that was rather expedient?

14:22:51
14:22:52
14:22:53
14:22:53
14:22:56

24

A.

Yes.

14:22:58

25

Q.

Have you ever challenged the

14:22:59

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constitutionality of an Irish law?

MR. WAXMAN:

Personally or on

14:23:03
14:23:06

behalf of a client?

14:23:07

Q.

14:23:08

client?

A.

No, I have not.

14:23:10

Q.

All right.

Let's, if we will,

14:23:12

move to the duties of a liquidator and in

14:23:20

10

particular with regard to the former

14:23:29

11

directors of the company.

14:23:37

12

liquidator was aware that the former

14:23:44

13

directors were accused of fraud, and I

14:23:47

14

say the previous directors of a company

14:23:53

15

they were appointed to liquidate, what is

14:23:55

16

the duty of the liquidator in such a

14:23:57

17

case?

14:23:59

18

Obviously on behalf of a

14:23:09

Sorry.

MR. WAXMAN:

If a

Incomplete

14:24:01

19

hypothetical and it's unclear what

14:24:02

20

you mean by accused.

14:24:05

21

would depend upon whom.

22

it would depend upon what the basis

14:24:09

23

for the accusations were, if

14:24:10

24

there's a madman in a penitentiary

14:24:12

25

it might not.

14:24:15

1-800-325-3376

I assume it
I suppose

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Q.

A citizen has sworn out a

14:24:15

warrant with the police alleging fraud on

14:24:17

behalf of the directors?

14:24:21

MR. WAXMAN:

5
6

Is the citizen

14:24:25

mentally competent?
MR. O'NEILL:

14:24:24

Yes, it is a

14:24:26

mentally competent individual who

14:24:27

has sworn out a warrant with the

14:24:28

10

police alleging fraud by the former

14:24:30

11

directors.

14:24:31

12

MR. WAXMAN:

And do they have

14:24:32

13

personal knowledge of the things

14:24:33

14

that they are swearing to?

14:24:34

15

MR. O'NEILL:

16

it.

17

Q.

They swear to

14:24:35
14:24:36

What are the duties of a

14:24:36

18

liquidator in the case where they have

14:24:37

19

such a case, where the warrant has been

14:24:39

20

sworn out with the police alleging fraud

14:24:43

21

by the directors?

14:24:45

If there is

14:24:46

23

sufficient information in that

14:24:47

24

hypothetical you should answer it.

14:24:48

25

But if there's not, you should make

14:24:49

22

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MR. WAXMAN:

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clear what else you would need to

14:24:51

know in order to answer the

14:24:53

question.

14:24:54

Q.

14:25:09

A gentleman named Ganley has

sworn out a warrant against the former

14:25:11

directors of Anglo Irish Bank and IBRC

14:25:13

alleging fraud.

14:25:16

A.

I'm not aware of that case.

14:25:19

10

Q.

Okay.

14:25:22

If there is a reason to

11

suspect that there had been fraud, what

14:25:28

12

is the duty of the liquidator?

14:25:30

13

A.

Well in terms of what the

14:25:32

14

liquidator has to do is, and using your

14:25:34

15

example as a case, I am not aware whether

14:25:37

16

Mr. Ganley has made a claim to the

14:25:40

17

liquidator directly that there has been

14:25:44

18

fraud.

14:25:46

19

person in respect of that, then the duty

14:25:48

20

of the liquidator would be to investigate

14:25:50

21

that.

14:25:52

If there is a claim made by any

22

Q.

Okay.

14:25:53

23

A.

As part of the ongoing

14:25:53

24

investigation which Mr. Wallace referred

14:25:55

25

to this morning in terms of reporting

14:25:56

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then to the director of corporate

14:25:58

enforcement about the actions of the

14:26:00

former directors.

14:26:02

Q.

Okay.

So the liquidator would

14:26:03
14:26:06

have a duty to investigate.

the concept of reporting criminal acts

14:26:10

discovered to the police?

14:26:14

A.

9
10

What about

Yes, I believe the liquidator

would have a duty to do that.


Q.

11

Do you know is the liquidator

14:26:18
14:26:20
14:26:21

12

investigating the claims by Mr. Flynn

14:26:25

13

that he has been defrauded by the bank

14:26:27

14

and by Mr. Ganley that fraud occurred?

14:26:29

15

A.

The first -- if you take Mr.

14:26:33

16

Ganley first, as I mentioned to you a few

14:26:36

17

moments ago I am not aware of anything

14:26:38

18

that Mr. Ganley has made a claim directly

14:26:40

19

to the liquidators in.

14:26:42

20

not been copied or have seen any papers

14:26:44

21

from Mr. Ganley claiming fraud against

14:26:48

22

any person.

14:26:50

23

I certainly have

In respect of Mr. Flynn, I'm

14:26:51

24

aware that Mr. Flynn has sought to issue

14:26:53

25

the proceedings in the Southern District

14:26:55

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of New York.

claims made directly to the liquidator

14:27:01

about overcharging in Mr. Flynn's case

14:27:03

and asking the liquidator to do anything

14:27:06

in that regard.

14:27:08

of that.

Q.

I am not aware directly of

14:26:57

I'm not aware directly

14:27:10

So are you aware that the

14:27:11

liquidator is doing anything with regard

14:27:19

10

to the investigation of potential fraud

14:27:21

11

by Anglo and/or IBRC?

14:27:23

12

A.

I know that the liquidators

14:27:26

13

are looking into the actions of the

14:27:29

14

former directors as part of their ongoing

14:27:31

15

investigative, and that is still ongoing,

14:27:33

16

that has not been concluded.

14:27:36

17
18

Q.

A.

It would take the ambit of all

of the actions of the directors.

21

MR. WAXMAN:

14:27:37
14:27:39

well as other things?

19
20

And this is vis-a-vis fraud as

Remember, you

14:27:39
14:27:41
14:27:44

22

have to let him finish asking his

14:27:44

23

question before you start answering

14:27:46

24

it, even if you know what he's

14:27:48

25

going to ask.

14:27:50

1-800-325-3376

Just give him the

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courtesy of allowing him to finish

14:27:51

his question.

14:27:53

Q.

14:27:54

Who are you retained by in

14:27:58

this Irish proceeding?

A.

By the special liquidators.

14:28:00

Q.

You were not retained by the

14:28:01

minister, you were retained by the

14:28:04

special liquidators?

14:28:06

10

A.

That's correct.

14:28:06

11

Q.

And you were -- and your firm

14:28:07

12

is paid by the special liquidators, not

14:28:09

13

by the minister?

14:28:12

14

A.

15

That is correct.

14:28:13

MR. WAXMAN:

14:28:13

Pause, make sure

16

he's done and then answer the

14:28:15

17

question.

14:28:17

18

Q.

And when were you retained?

14:28:19

19

A.

We were retained on the

14:28:21

20

appointment of the special liquidators on

14:28:24

21

the 7th of February, 2013.

14:28:26

Were there any communications

14:28:28

23

between yourself and KPMG or the special

14:28:30

24

liquidators prior to the 7th of February?

14:28:33

22

Q.

25

1-800-325-3376

A.

The first time I heard about

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the proposed special liquidation was on

14:28:37

the afternoon of the 6th of February.

14:28:40

That was when I first heard of it.

14:28:42

Q.

5
6

And I think I've asked this

14:28:54

question but I can't remember.


MR. WAXMAN:

14:28:45

I'll help you

14:28:55

with that.

14:28:56

Q.

14:28:57

Are you familiar at all with

10

the nature of the promissory notes issued

14:29:01

11

by the Irish government to the bank?

14:29:03

12

MR. WAXMAN:

Asked and

You can answer again.

14:29:05
14:29:06

13

answered.

14

A.

I'm not aware.

14:29:08

15

Q.

You're not aware.

14:29:09

16

MR. O'NEILL:

14:29:11

17

have any more questions.

18

you.

19

Thank you.

20

know something.

I don't think I
Thank

14:29:12

I appreciate it.

14:29:14

You actually seemed to

14:29:16

Very good.

14:29:18

21

MR. HENKIN:

Off the record.

14:29:28

22

(Discussion was held off the

14:29:29

23

record.)

24
25

1-800-325-3376

EXAMINATION BY MR. HENKIN:


Q.

Mr. Traynor, my name is Doron

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Henkin, I'm counsel for Castleway and

14:30:34

Walnut, and I have a few questions for

14:30:36

you as well.

14:30:39

A.

Sure.

14:30:40

Q.

Do you know when the IBRC came

14:30:40

14:30:46

into existence as an entity?

A.

I think it came into existence

14:30:49

in, let me just -- I think it came into

14:30:51

10

existence in 2011, I think what was known

14:30:58

11

as the Old Irish Corporation and Irish

14:31:02

12

Nationwide Building Society merged.

14:31:05

13

think it was pursuant to -- it was either

14:31:07

14

2010 or 2011.

14:31:10

15

date.

16

I can't recall at this moment.

17

I don't have the exact

I know I think it's in the papers.

Q.

Do you know what happened as

14:31:12
14:31:14
14:31:15

18

an entity matter to old Anglo, Anglo

14:31:23

19

Irish Bank PLC?

14:31:27

20

an entity?

21
22

A.

Does it still exist as

14:31:29

Yes, it is still -- it is now

14:31:31
14:31:35

IBRC.

23

Q.

It is --

14:31:36

24

A.

It --

14:31:38

25

Q.

Go ahead, I don't mean to cut

14:31:39

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14:31:40

you off.

A.

And I apologize, I was about

14:31:41

to cut you off.

It was re-registered as

14:31:42

a limited company first and then as part

14:31:45

of it it was then brought in to Irish

14:31:48

Bank Resolution Corporation Limited.

14:31:53

8
9

Q.
time.

10

Let me take that a step at a


What do you mean by re-registered?

A.

It was a public limited

14:31:53
14:31:55
14:31:58

11

company, a PLC and it re-registered as a

14:31:59

12

private company limited by shares which

14:32:02

13

we have under Irish law.

14:32:04

14
15

Q.

And was that achieved by

14:32:06
14:32:08

virtue of statute?

16

A.

Yes.

14:32:10

17

Q.

And that would be the 2010 --

14:32:10

18

A.

I think it was --

14:32:15

19

Q.

-- credit act?

14:32:16

20

A.

Yes, I think it was the Credit

14:32:17

21

14:32:20

Stabilization Act 2010.

22

Q.

Have you paid any attention

14:32:21

23

yourself to the Castleway or Walnut loan

14:32:41

24

matters?

14:32:45

25

1-800-325-3376

MR. WAXMAN:

Vague, but you

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can answer.

14:32:47

A.

I am aware, obviously through

14:32:48

this process of the Castleway and Walnut

14:32:51

position.

14:32:54

wasn't aware of anything.


Q.

But outside of this process, I

14:32:57

Do you have any involvement

14:32:58

today in matters relating to the two

14:33:03

loans, other than what has been talked

14:33:07

10

about at the table where you've been

14:33:08

11

present here?

14:33:10

12

A.

No.

14:33:11

13

Q.

To your knowledge, were there

14:33:15

14

any loans or assets -- strike that.

15

Were there loans that were

14:33:22
14:33:27

16

transferred from IBRC to NAMA between the

14:33:29

17

time IBRC came into being and the

14:33:35

18

beginning of the special liquidation?

14:33:38

To my knowledge, I think most

14:33:41

20

loans had gone from Anglo to NAMA before

14:33:43

21

IBRC itself came into existence.

14:33:48

22

that's on the basis, I can't recollect

14:33:51

23

the date that IBRC came into existence.

14:33:53

24

I think most of the loans transferred to

14:33:55

25

NAMA in 2009, '10 and into the early part

14:33:58

19

A.

1-800-325-3376

But

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14:34:02

of 2011, into NAMA.

Q.

I'd like you to take a look at

14:34:05

what I already marked as Wallace 2, 3, I

14:34:22

apologize, Wallace 3.

14:34:32

A.

It's the report of the...

14:34:38

Q.

Yes.

14:34:42

MR. WAXMAN:

It is a partial

transcript that we saw earlier.

9
10

MR. HENKIN:

No, it is a

14:34:43
14:34:47
14:34:49

11

different document.

12

from 2 to 3.

14:34:50

13

A.

14:34:52

14

It's the controller general

14:34:54

special report.

15
16

I switched

14:34:42

Q.

Right.

Have you seen this

report before?

14:34:55
14:34:56

17

A.

No.

14:34:57

18

Q.

Are you aware of what

14:35:12

19

consideration was paid to the

14:35:15

20

predecessors of IBRC for those loans that

14:35:18

21

were transferred in 2009, '10 and the

14:35:21

22

beginning of '11?

14:35:25

23

A.

No, I am not.

14:35:26

24

Q.

Have you been asked to look

14:35:34

25

into the question of that consideration

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and whether it was appropriate or

14:35:39

adequate?

14:35:43

MR. WAXMAN:

I'll instruct the

14:35:45

witness not to answer.

asking the witness what are the

14:35:47

matters that his client has asked

14:35:48

him to advise them on.

14:35:50

proper, counsel.

10

You're now

14:35:44

That's not

Now if you want to rephrase it

14:35:53
14:35:55

11

so that it's by someone other than

14:35:56

12

the special liquidators, some

14:35:58

13

outside party, I guess that would

14:36:00

14

be okay.

14:36:01

15

what you had in mind.

16
17
18

Q.

But I don't think that's

(Instruction not to answer.)

14:36:04

Well let's try it a different

14:36:05
14:36:06

way.

19

14:36:03

Do you believe that it is

14:36:06

20

within the scope of the special

14:36:08

21

liquidators' activities to review,

14:36:15

22

whether or not you've actually done so,

14:36:17

23

the question of the adequacy of

14:36:19

24

consideration that was paid for those

14:36:22

25

loans?

14:36:23

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2
3

A.

No, I don't, I don't believe

14:36:29
14:36:30

so.

Q.

And why not?

14:36:30

A.

Well one is, I think, it is a

14:36:31

number of years ago, in the first

14:36:38

instance, and secondly -- secondly, no

14:36:40

one has asked special liquidator, in my

14:36:51

knowledge, to look at that.

14:36:56

10

Q.

Is there, to your knowledge is

14:37:01

11

there any relationship in terms of the

14:37:04

12

performance of those loans that have been

14:37:09

13

transferred and the financial position of

14:37:13

14

IBRC?

14:37:20

15
16

And I can -A.

Sorry, I don't understand the

14:37:24

question.

17

Q.

14:37:22

Is there any connection, that

14:37:24

18

is if the loans that had been transferred

14:37:25

19

performed better than expected or worse

14:37:30

20

than expected, does that have any effect

14:37:32

21

on IBRC that you're aware of?

14:37:35

22

A.

Not that I'm aware of.

14:37:37

23

Q.

When you were discussing the

14:37:39

24

IBRC Act which is, what exhibit number

14:37:51

25

are we at?

14:37:54

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A.

Traynor 1.

Q.

Traynor 1.

14:37:55
14:37:56

You were

discussing the purposes of the act, and

14:37:58

I'm not sure where we were -- what you

14:38:04

were looking at at that point.

14:38:08

looking at the preamble?

Were you

14:38:09

A.

Yes.

14:38:11

Q.

Which is on --

14:38:12

10

A.

Yes.

14:38:13

MR. WAXMAN:

11

Let him finish

14:38:14

12

asking the question, even if you

14:38:15

13

know what it is he's going to ask,

14:38:18

14

just to make sure the question

14:38:20

15

doesn't change while the lawyer is

14:38:21

16

framing it.

14:38:24

17

MR. HENKIN:

18

changed.

19

Q.

20

Don't be in a rush.
It wouldn't have

14:38:30

Okay.

I'd like you also to look at

MR. WAXMAN:

22

page?

23

Q.

24
25

1-800-325-3376

Q.

14:38:31
14:38:33

section 3 of the act.

21

14:38:29

Can you give us a

14:38:39
14:38:40

Which is page number 5.

14:38:41

MR. WAXMAN:

14:38:43

Thank you.

Do you see a list of purposes

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14:38:51

there as well?

A.

Yes, I do.

14:38:52

Q.

Which of these purposes relate

14:38:53

to the interests of creditors of the

14:39:00

IBRC?

14:39:04

A.

7
8

14:39:08

Sorry -MR. WAXMAN:

Lacks foundation

14:39:09

and calls for speculation as

14:39:10

10

phrased.

14:39:11

11

Q.

All right.

Purpose A says "to

14:39:14

12

help to address the continuing serious

14:39:18

13

disturbance in the economy of the state."

14:39:21

14

Would anything in section A

14:39:25

15

speak to the interests of the Flynns in

14:39:27

16

seeking redress for -- as they've been

14:39:32

17

seeking in this case?

14:39:39

18

MR. WAXMAN:

19

and ambiguous.

20

understand it.

21

Q.

Question is vague

I'm not sure I

Let's try it again.

14:39:40
14:39:41
14:39:43

Does

14:39:43

22

section A address the interests of

14:39:45

23

creditors of the IBRC?

14:39:47

I think

14:39:56

you could say indirectly, yes, it does.

14:39:59

24
25

A.

1-800-325-3376

I'd be speculating.

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Q.

In what way?

14:40:03

A.

Because they would be -- it's

14:40:04

all part of a serious disturbance in the

14:40:13

economy of the state and their interests

14:40:16

obviously with IBRC and the ability of

14:40:18

IBRC to meet those obligations.

14:40:22

8
9

Q.

They would be in that indirect

14:40:24
14:40:26

sense?

10

A.

I believe so.

14:40:26

11

Q.

How about section -- and would

14:40:28

12

you say the same -- what would you

14:40:32

13

characterize section B as and its

14:40:34

14

relationship to creditors and their

14:40:36

15

interests?

14:40:38

A.

16

I think it's in their interest

14:40:40

17

to have the winding up in an orderly and

14:40:43

18

efficient manner.

14:40:46

19

Q.

How about section C where it

14:40:48

20

says to end the exposure of the state and

14:40:50

21

the bank to IBRC, does that speak to the

14:40:54

22

interest of creditors?

14:41:01

23

A.

Yes.

14:41:02

24

Q.

How so?

14:41:04

25

A.

Because the state and the bank

14:41:05

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3
4

14:41:06

are creditors.
Q.

How about as to creditors

other than the state and the bank?

14:41:09
14:41:11

A.

Not under C.

14:41:14

Q.

Does D speak to the interest

14:41:16

of creditors other than the state and the

14:41:21

bank?

14:41:23

MR. WAXMAN:

That's an
What if

14:41:27
14:41:28

10

incomplete hypothetical.

11

they own bonds?

12

to answer a question with respect

14:41:32

13

to a creditor, we don't know all

14:41:33

14

the assets that the creditors own,

14:41:35

15

we don't know what bonds they may

14:41:37

16

hold of the state.

14:41:40

17

impossible to answer.

18

a government bond and the

14:41:44

19

government is stronger financially,

14:41:45

20

then they're helped.

14:41:47

21

Q.

14:41:48

You're asking him

So it's
Someone owns

Then let me establish a

14:41:41

14:41:51

22

hypothetical.

23

contractor that is owed $50,000 for

14:41:55

24

services over the preceding eight months

14:41:58

25

and is no longer providing services.

14:42:01

1-800-325-3376

Imagine a plumbing

14:41:30

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Let's take that contractor and ask if he

14:42:08

is helped -- and ask which of these

14:42:10

provisions A through J speak to that

14:42:12

person's interest?

14:42:14

MR. WAXMAN:

The hypothetical,

14:42:15

does the person ever want to do

14:42:16

business with the government again?

14:42:18

Does the person ever want to be a

14:42:19

10

subcontractor to someone who has a

14:42:20

11

contract with the government?

14:42:23

12

I think, counsel, with all

14:42:24

13

respect, all of these things help

14:42:25

14

almost every citizen of the state

14:42:27

15

and people who want to do business

14:42:29

16

with the state.

14:42:30

17

Q.

14:42:32

How about noncitizens of the

18

state, which ones of these would help

14:42:33

19

noncitizens?

14:42:36

20

MR. WAXMAN:

Do they want to

14:42:37

21

do business with the state?

22

there a provision under Irish law

14:42:39

23

that bars a noncitizen from doing

14:42:40

24

business with the state?

14:42:43

25

provisions under Irish law that

1-800-325-3376

Is

14:42:36

Are there

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prevent noncitizens from owning

14:42:46

government bonds?

14:42:48

I'm not aware of any but maybe

14:42:49

you are and so you can certainly

14:42:50

try and come up with a precise

14:42:52

enough hypothetical I suppose that

14:42:53

would allow someone to answer that

14:42:54

question.

14:42:56

10

14:42:57

But to the extent that a

11

government's economy or the

14:42:59

12

financial stability of the

14:43:01

13

financial system of a country is at

14:43:03

14

issue, I think it affects a whole

14:43:05

15

multitude of peoples in the

14:43:07

16

country, out of the country.

17

mean I think court can take

14:43:12

18

judicial notice of that.

14:43:14

19

MR. HENKIN:

I don't think so.

14:43:15

20

MR. WAXMAN:

Okay.

14:43:17

21

Q.

Is maximizing the return to

14:43:09

14:43:17

22

creditors one of the stated purposes of

14:43:19

23

the act?

14:43:22

24
25

A.

Well you could, you could

certainly say that it would be provided

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for the winding up in an orderly and

14:43:37

efficient manner.

14:43:39

4
5

Q.

I'd like to turn your

attention to section 12 of the act.

MR. WAXMAN:

And the page for

MR. HENKIN:
Q.

14:44:43
14:44:44
14:44:45

my edification?

14:44:33

Page 11.

Is one of the purposes of the

14:44:47
14:45:05

10

present liquidation and recognition

14:45:08

11

proceeding to sell loan assets of

14:45:12

12

properties in the United States free and

14:45:17

13

clear of provisions in those enactments

14:45:21

14

-- in those documents that would require

14:45:26

15

consent or other preconditions to

14:45:28

16

transfer?

14:45:30

17

MR. WAXMAN:

18

THE WITNESS:

19

MR. WAXMAN:

Lacks foundation.
Can I answer?
Yes, you can

14:45:31
14:45:36
14:45:37

20

answer.

14:45:39

21

A.

And one of the purposes of the

14:45:40

22

liquidation is to sell all loan assets of

14:45:42

23

the company both in Ireland, in the UK

14:45:44

24

and in the U.S. and whether or not they

14:45:47

25

have to be sold free of any transfer

14:45:50

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restrictions, I don't know in terms of

14:45:54

ultimately.

14:45:56

act gives is the ability to transfer

14:45:59

those loans free of any transfer

14:46:01

restrictions.

14:46:04

Q.

But what section 12 of the

The papers filed in connection

14:46:04

with the recognition petition state that

14:46:07

the remaining assets in, the remaining

14:46:09

10

loan assets in the United States are

14:46:14

11

proper -- are loan assets that remained

14:46:16

12

with IBRC because of transfer

14:46:19

13

restrictions.

14:46:21

14

the framework for my question.

15

Now that was -- so that's

Would it not be fair to say

14:46:26
14:46:36

16

that the goal of the United States is to

14:46:38

17

sell those assets free of such

14:46:40

18

restrictions as may apply?

14:46:41

19

A.

The goal of the liquidation is

14:46:45

20

to sell those assets.

21

there has to be any transfer or

14:46:48

22

restrictions that have to be overcome

14:46:50

23

certainly I think could be assisted by

14:46:54

24

that and would be looked at.

14:46:55

25

1-800-325-3376

Whether or not

14:46:44

But I don't know as I speak

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today whether that will be necessary or

14:46:57

not, as the case may be.

14:46:59

Q.

Does the statute, the IBRC Act

14:47:01

provide any guidance as to whether

14:47:06

persons who have the benefit of such

14:47:11

restrictions would receive any

14:47:13

compensation if the restrictions were

14:47:14

overridden?

14:47:21

10
11

A.

No, I don't believe there's

any such provision in the IBRC Act.

12

Q.

Are you aware of any

14:47:21
14:47:22
14:47:24

13

provisions somewhere else other than the

14:47:26

14

IBRC Act that speaks to that?

14:47:28

15
16

A.

Sorry, I don't understand your

14:47:33

question.

17

Q.

14:47:31

The tail end of your answer

14:47:33

18

was you are not aware of anything to that

14:47:37

19

effect in the IBRC Act.

14:47:40

20

MR. WAXMAN:

21

That's because

that's what you asked him.

22

MR. HENKIN:

23

Q.

Right.

So I followed up asking is

14:47:41
14:47:42
14:47:43
14:47:43

24

there such compensation available to

14:47:45

25

holders of those loans or borrowers under

14:47:48

1-800-325-3376

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those loans under some other act of which

14:47:50

you are aware?

14:47:52

A.

No, not that I'm aware of.

14:47:53

MR. WAXMAN:

14:48:03

Are you aware of

one way or the other, or you just

14:48:04

don't know?

14:48:06

THE WITNESS:

I just don't

14:48:08

know.

14:48:07

In your declaration and the

14:48:09

11

supplement to the declaration you most

14:48:49

12

recently presented, you referenced a

14:48:51

13

judgment having been entered against Mr.

14:49:00

14

McCann.

14:49:02

15

A.

Yes, I'm aware of that.

14:49:05

16

Q.

Are you aware whether that

14:49:07

10

Q.

Do you recall that?

17

judgment had anything to do with the

14:49:11

18

United States properties that he owns?

14:49:14

19

A.

I am not involved in that

14:49:18

20

case, but my understanding is that that

14:49:19

21

judgment was on foot of guarantees that

14:49:22

22

Mr. McCann had given in respect of

14:49:25

23

companies and loans that he had, or

14:49:28

24

companies associated with him.

I do not

14:49:29

25

specifically know whether they are to do

14:49:31

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14:49:33

with U.S. assets or not.

MR. HENKIN:

That's it for me.

14:49:54
14:49:55

Thank you.
MR. WAXMAN:

of follow-up questions.

14:49:57

MR. DURRER:

14:49:59

I have a couple

14:49:56

Before you start,

Eric, off the record.


(Discussion was held off the

9
10

12

Q.

14:50:02
14:50:02

record.)

11

14:50:01

EXAMINATION BY MR. WAXMAN:

14:50:12

You were present when Mr.

14:50:14

13

Wallace was asked questions this morning

14:50:18

14

with regard to various applications that

14:50:23

15

have been filed with the High Court and

14:50:26

16

they were identified by application

14:50:29

17

number.

14:50:32

18

A.

I do.

14:50:33

19

Q.

Do you have any understanding

14:50:34

20

Do you recall that testimony?

as to what those applications refer to?

14:50:36

21

A.

Yes.

14:50:40

22

Q.

And can you tell me what you

14:50:40

23

know about those applications?

24
25

A.

Yes.

Well the first thing is

the record numbers that were given were

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incorrect.

those because our firm is involved in

14:50:51

that, that there are about six

14:50:53

applications brought by the special

14:50:54

liquidators to disclaim onerous leases

14:50:58

against the landlords in question.

14:51:01

8
9
10

Q.

Plus, I am aware from filing

14:50:47

14:51:05

And what was the purpose of

those applications?

Why was the special

liquidator seeking to take that action?

14:51:06
14:51:09

Because obviously IBRC would

14:51:11

12

have had various offices around Ireland

14:51:15

13

prior to liquidation and those offices

14:51:20

14

are no longer required.

14:51:22

15

liquidators do not want to be incurring

14:51:24

16

any costs in respect of those offices and

14:51:26

17

want to effectively get out of those

14:51:28

18

leasehold interests.

14:51:30

A.

11

So the

Now there were some questions

14:51:31

20

that were asked as to whether or not the

14:51:33

21

information contained in those

14:51:36

22

applications was publicly available.

23

you recall those questions?

19

Q.

Do

14:51:38
14:51:41

24

A.

I do.

14:51:42

25

Q.

Are the applications that are

14:51:43

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on file by the special liquidator treated

14:51:45

any differently in that respect than

14:51:49

applications that would be filed by a

14:51:52

liquidator in a case brought under the

14:51:56

Companies Act?

14:52:01

A.

No.

14:52:02

Q.

And just to make sure I

14:52:07

understand your testimony, there's no

14:52:09

10

different level of access that applies in

14:52:11

11

this case that would -- than that would

14:52:13

12

apply to a case brought under the

14:52:16

13

Companies Act?

14:52:18

14
15

A.

That's correct, it's the exact

14:52:20

same.
Q.

16

14:52:18

You were also asked a couple

14:52:23

17

of questions about the ability of an

14:52:25

18

Irish citizen to challenge the

14:52:33

19

constitutionality of the Irish Bank

14:52:36

20

Resolution Corporation Act, do you recall

14:52:40

21

that?

14:52:43

22

A.

I do.

14:52:43

23

Q.

Do you know whether or not Mr.

14:52:44

24

Flynn is an Irish citizen?

25

1-800-325-3376

A.

I believe he is.

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Q.

And if he were an Irish

14:52:52

citizen, is it your understanding that he

14:52:54

would have the ability to challenge the

14:52:56

constitutionality of the act if he so

14:52:58

chose?

14:53:02

A.

Yes, he would.

14:53:02

Q.

In order to conduct the

14:53:03

orderly liquidation that is envisioned by

14:53:12

10

the act, was it necessary for the special

14:53:17

11

liquidator to obtain working capital or

14:53:21

12

otherwise obtain funding in order to be

14:53:24

13

able to carry out its duties under the

14:53:26

14

act?

14:53:28

15

MR. HENKIN:

I object to the

16

form of the question.

17

answer.

18

A.

Yes, there was.

Go ahead and

14:53:29
14:53:30
14:53:32

There was a

14:53:32

19

need for working capital and when the

14:53:34

20

liquidator was appointed on the 7th of

14:53:38

21

February.

14:53:40

22
23

Q.

Who provided that working

14:53:40
14:53:42

capital?

24

A.

NAMA.

14:53:42

25

Q.

And do you know -- strike

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that.

Let me confer for just a second.

14:53:50

(Discussion off the record.)

14:54:03

Do you have any

14:54:03

3
4

Q.

understanding

as to whether or no the ability to make

14:54:05

challenges to that charge affected the

14:54:10

ability of NAMA to provide the working

14:54:17

capital required by the special

14:54:21

liquidator?

14:54:23

10
11

A.

I'm sorry, I don't quite

14:54:27

understand your question.

12

Q.

14:54:26

Do you have any understanding

14:54:28

13

if NAMA would have been willing to

14:54:31

14

provide the funding that was required by

14:54:33

15

the special liquidators if there was an

14:54:35

16

ability to challenge the charge that was

14:54:38

17

made?

14:54:42

18
19

A.

I don't have any direct

14:54:44

knowledge of that.

20

MR. WAXMAN:

21

That's all I have.

22

MR. O'NEILL:

23
24
25

1-800-325-3376

And that's it.

one more question.

14:54:56
14:54:57

May I just

14:54:59
14:55:02

briefly.
MR. WAXMAN:

14:54:43

I'm sorry, I have


Thank you.

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EXAMINATION BY MR. WAXMAN:

Q.

There were a couple of

14:55:10
14:55:10

questions that were asked about whether

14:55:12

or not there were actions -- whether or

14:55:14

not there are were any actions under 280

14:55:18

that might be brought against the special

14:55:21

litigator -- sorry, special liquidator,

14:55:23

that would require injunctive relief,

14:55:28

whether it be mandatory or prohibitory.

14:55:33

10
11

Do you recall those questions?

14:55:35

12

A.

I do.

14:55:36

13

Q.

As you sit here today, can you

14:55:37

14

think of actions that could be brought

14:55:40

15

against the special liquidator that would

14:55:43

16

not require the grant of an injunction,

14:55:45

17

whether it be mandatory or prohibitory?

14:55:48

18

A.

Yes.

If a creditor, for

14:55:50

19

instance, submitted a claim to the

14:55:57

20

liquidator and the liquidator reject that

14:55:59

21

claim, the creditor would be entitled

14:56:02

22

under section 280 to issue an application

14:56:05

23

to the court and to have his claim

14:56:08

24

assessed or not.

14:56:11

25

there would be any requirement for

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I don't believe that

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injunctive relief in that situation.

3
4

Q.

14:56:18
14:56:19

mind?
A.

5
6

Anything else that comes to

14:56:15

I'm sure there's a few other

examples but I can't think of them.

Q.

setoff?

A.

What about a claim involving a

14:56:20
14:56:24
14:56:28
14:56:29

Well there are claims,

14:56:30

10

proceedings in being at the moment where

14:56:34

11

borrowers are seeking to set off claims

14:56:36

12

against monies owed.

14:56:38

13

involved any injunctive relief being

14:56:42

14

sought in those proceedings.

14:56:45

15

Q.

And that has not

What about if a creditor

14:56:46

16

wanted to have a meeting of creditors

14:56:49

17

scheduled, would that require the grant

14:56:54

18

of injunctive relief?

14:56:57

19
20
21
22
23

A.

14:56:59

I don't believe so.


MR. WAXMAN:

Okay.

Now I'm

14:57:03

done, thank you.


MR. ZACK:

14:57:02

How many questions

14:57:06
14:57:07

do you have?

24

MR. O'NEILL:

Two or three.

14:57:08

25

MR. DURRER:

We had someone

14:57:11

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14:57:13

dial in.

MR. O'NEILL:

and I'll go down.

MR. DURRER:

You can go down

14:57:13
14:57:14

Leonard, if you

14:57:16

want to go and say we will be there

14:57:18

in two or three minutes.

14:57:20

MR. ZACK:

You want me to tell

the judge he has to wait?

14:57:21
14:57:22

The judge won't

14:57:24

11

be waiting, it will be his clerk on

14:57:26

12

the phone.

14:57:28

10

MR. O'NEILL:

MR. ZACK:

14

MR. DURRER:

Your room, 226.

14:57:29

15

MR. O'NEILL:

The one you've

14:57:32

16

moved your clothing into.

17
18

Q.

Which room?

14:57:28

13

14:57:34

EXAMINATION BY MR. O'NEILL:

14:57:36

Have you become enlightened

14:57:38

19

since our conversation earlier about who

14:57:41

20

may bring an action under the -- as to

14:57:42

21

the constitutionality of an Irish

14:57:45

22

statute?

14:57:49

23

Flynn,

24

is not an Irish citizen bring an action?

25

1-800-325-3376

A.

I mean mention was made of Mr.


but could an American citizen who

I'm not aware of that.

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Q.

So basically you don't know

14:57:58

the answer, basically, except that an

14:58:00

Irish citizen may bring such an action?

14:58:02

A.

That's correct.

14:58:04

Q.

Other than that, you have no

14:58:05

idea whether a U.S. citizen or a Japanese

14:58:07

citizen has any standing to bring an

14:58:09

action challenging the constitutionality?

14:58:11

10

So a U.S. creditor may or may not be able

14:58:14

11

to bring an action?

14:58:17

12

A.

I don't know that.

13

Q.

Okay, that's fine.

14:58:19

Under 280

14:58:21

14

you said that there were no -- there was

14:58:24

15

no litigation under 280 of the Companies

14:58:26

16

Act.

14:58:29

17

there's litigation on claims on setoffs.

14:58:31

18

Under what provisions are those claims

14:58:37

19

being pursued?

14:58:39

20

But then you mentioned just now

A.

What I said in my earlier

14:58:40

21

testimony was that I was not aware of any

14:58:41

22

proceedings where section 280 had been

14:58:43

23

referred to in those proceedings.

14:58:45

24

Q.

Right.

14:58:47

25

A.

In respect of the example that

14:58:48

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I gave about setoff, that is in respect

14:58:49

of it's not under a particular provision

14:58:52

such as 280.

14:58:55

arrangements between the borrowers and

14:58:58

the banks in question.

14:58:59

Q.

7
8

It's under the contractual

So these are under contract

between the bank and the borrower?

14:59:00
14:59:02

A.

Correct.

14:59:04

10

Q.

So they're not challenging the

14:59:06

11

powers of the liquidator, this is a

14:59:08

12

contractual dispute between the bank and

14:59:10

13

the party involved?

14:59:12

14

A.

Correct.

14:59:14

15

Q.

The issue of meetings of

14:59:17

16

creditors, having gone through just as we

14:59:29

17

did fairly painstakingly and I apologize

14:59:32

18

for that, the IBRC Act and the

14:59:34

19

modifications to the Companies Act, is it

14:59:45

20

your belief that there is any means to

14:59:49

21

force the special liquidators to call a

14:59:53

22

meeting of creditors having all of those

14:59:56

23

provisions being stricken from the act?

14:59:58

24
25

1-800-325-3376

MR. WAXMAN:

Are you ignoring

Mr. Wallace's testimony that there

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will be a meeting of creditors held

15:00:03

at the appropriate point?

Are you

15:00:04

excluding that from your question?

15:00:06

MR. O'NEILL:

Yes.

15:00:07

I'm excluding the meeting of

15:00:08

creditors to be told what they're going

15:00:11

to get.

15:00:12

the word traditional, Companies Act

15:00:14

10

liquidation, meeting of creditors which

15:00:17

11

is an ongoing process.

15:00:18

Q.

12

I'm talking about the, avoiding

A.

I don't agree with you that in

15:00:21

13

a normal court liquidation there is an

15:00:23

14

ongoing meeting of creditors that takes

15:00:24

15

place.

15:00:27

16

happen.

17

Q.

18

In my experience, that does not

15:00:28

That there is a committee of

creditors in a Companies Act liquidation?

19

A.

15:00:29
15:00:30

There is an ability to have a

15:00:34

But I would imagine in 85 to

15:00:36

20

committee.

21

90 percent of court liquidations there is

15:00:41

22

no such committee of inspection actually

15:00:43

23

in place.

15:00:45

24
25

Q.

How does one put such a

committee of inspection in place, if

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you're a creditor in a Companies Act

15:00:52

liquidation?

15:00:56

A.

15:00:57

You mention a Companies Act

15:01:01

liquidation, so there's two.

Q.

I understand, okay.

In either

15:01:02

of the Companies Act liquidations, let's

15:01:04

do both of them, there are only two?

15:01:07

A.

In the creditors voluntary

15:01:09

10

winding up, the committee of inspection

15:01:11

11

would be appointed at the meeting of

15:01:13

12

creditors which takes place.

15:01:14

13

Q.

Right.

15:01:15

14

A.

In a court act liquidation, on

15:01:16

15

the hearing of the petition at which the

15:01:19

16

winding up order would be made, an

15:01:20

17

application could be made by the creditor

15:01:23

18

at that point to have a -- for a

15:01:25

19

committee of inspection to be appointed.

15:01:28

20

Q.

Okay.

Now I'm going to ask

15:01:30

21

you to, bearing in mind the extensive

15:01:31

22

review of the act and the modification to

15:01:35

23

the Companies Act, if a creditor

15:01:37

24

petitioned under section 280 for the

15:01:44

25

appointment, for the creation of a

15:01:47

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committee of creditors for IBRC, is it

15:01:50

within the power of the court to instruct

15:01:55

the special liquidators to create such a

15:01:57

committee, given the fact that all of the

15:01:59

provisions relating to committees of

15:02:02

creditors have been taken out of the

15:02:04

Companies Act for that, by that

15:02:06

legislation?

15:02:09

10

MR. WAXMAN:

So you're asking

15:02:11

11

him how a court would rule on that

15:02:12

12

issue?

15:02:13

13

MR. O'NEILL:

I'm asking him

15:02:14

14

is it possible that a court could

15:02:15

15

even consider it, is what I'm

15:02:16

16

asking.

15:02:18

17

MR. WAXMAN:

A court can

15:02:18

18

consider anything that's put before

15:02:19

19

it.

15:02:20

20

MR. O'NEILL:

But all of the

15:02:21

21

provisions relating to creditors

15:02:22

22

committees have been removed from

15:02:23

23

the Companies Act.

15:02:25

24
25

1-800-325-3376

But then you're

15:02:26

asking him to predict what a court

15:02:26

MR. WAXMAN:

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would do given that state of

15:02:28

affairs.

15:02:29

can do that.

I don't think the witness

15:02:30

The question, if you're asking

15:02:32

the question could someone bring

15:02:33

that challenge notwithstanding the

15:02:34

changes to the legislation, in the

15:02:37

legislation.

15:02:39

Then you can do

15:02:40

10

MR. O'NEILL:

11

whatever you want.

15:02:41

12

Q.

15:02:42

Is there a scope for the court

to order such?

14

legal opinion, putting your scholarly hat

15:02:48

15

on, a scope for the court to order such a

15:02:52

16

committee of creditors to be formed?

15:02:54

17

A.

Is there scope in your

15:02:45

13

In my view under section 280,

15:02:57

18

there is the ability for the court to

15:03:00

19

make an order which could be that a

15:03:04

20

committee of inspection would be

15:03:05

21

appointed.

15:03:06

22
23
24
25

1-800-325-3376

MR. O'NEILL:

I have no more

15:03:15

questions.
MR. WAXMAN:

15:03:14

Okay.

Let's see

what they're doing in the other

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15:03:20

room.

(A recess was had.)

15:17:41

MR. WAXMAN:

15:18:16

Same stipulation

that was agreed to for Mr. Wallace

15:18:20

will apply with respect to Mr.

15:18:22

Traynor.

15:18:24

(Time noted:

3:19 p.m.)

9
10

_______________________

11

MARK TRAYNOR

12

Subscribed and sworn to before me

13

this _____ day of _________, 2013.

14
15

__________________________________

16
17
18
19
20
21
22
23
24
25

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3
4

NAME OF CASE:
DATE OF DEPOSITION:
NAME OF WITNESS:
I wish to make the following changes, for the
following reasons:
PAGE LINE
____ ____
CHANGE: _______________________

5
6

REASON: _______________________
____ ____

7
8

REASON: _______________________
____ ____

9
10

____ ____

____ ____

____ ____

CHANGE: _______________________
REASON: _______________________

____ ____

17
18

CHANGE: _______________________
REASON: _______________________

15
16

CHANGE: _______________________
REASON: _______________________

13
14

CHANGE: _______________________
REASON: _______________________

11
12

CHANGE: _______________________

CHANGE: _______________________
REASON: _______________________

____ ____

19

CHANGE: _______________________
REASON: _______________________

20

Subscribed and sworn to before me

21

this ____ day of ____________, 2012.

22
23
24

______________________
(Notary Public)

_____________________
My Commission Expires:

25

1-800-325-3376

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Page 98
1
2

C E R T I F I C A T E
STATE OF NEW YORK

3
4

: ss.
COUNTY OF NEW YORK

5
6

We, MARK RICHMAN and GAIL F. SCHORR,

Certified Shorthand Reporters, Certified

Realtime Reporters and Notaries Public within

and for the State of New York, do hereby

10

certify:

11

That MARK TRAYNOR, the witness whose

12

deposition is hereinbefore set forth, was duly

13

and that such deposition is a true record of the

14

testimony given by the witness.

15

We further certify that we are not

16

related to any of the parties to this action by

17

blood or marriage, and that we are in no way

18

interested in the outcome of this matter.

19

IN WITNESS WHEREOF, we have hereunto

20

set our hands this ____ day of ___________,

21

2013.

22
23

_______________________

24

MARK RICHMAN, CSR, CRR

_______________________
GAIL F. SCHORR, CSR, CRR

25

1-800-325-3376

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Page 99
1
2

I N D E X

EXAMINATION BY:

PAGE:

MR. O'NEILL

4, 89

MR. HENKIN

65

MR. WAXMAN

87

* * * * * * * *

E X H I B I T S

9
10

DESCRIPTION

11

(Traynor Exhibit 1 for

12

identification, document

13

titled "Exhibit B, Irish

14

Bank Resolution Corporation

15

Act 2013.")

16

(Traynor Exhibit 2 for

17

identification, document,

18

properly marked up copy of

19

the Companies Act.)

PAGE

LINE

12

12

17

20
21
22
23
24

(Instruction not to answer.)

70

16

25

1-800-325-3376

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Page 1
A
ability
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1-800-325-3376

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applying
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11:12 22:14,17
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5:18 9:3 28:22 33:6,10
59:15 85:20 93:11,19
95:21
appointment

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Page 2
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1-800-325-3376

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81:24
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2:10
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87:24 88:19
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67:6 83:5 84:5,12
87:7,14
Building
66:12
business
76:8,15,21,24

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Page 3
certainly
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C
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C

1-800-325-3376

85:6
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compel
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compensation
80:8,24
competent

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Page 4
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continuing
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D
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58:6 66:15 68:23 97:1
day
32:19 96:13 97:21
98:20

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Page 5
deal
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designated

1-800-325-3376

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dhenkin@henkinla...
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17:9 18:4 23:20 24:6
employment
33:18
enactments
78:13

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Page 6
enforceability
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examples
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exception
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1-800-325-3376

excluding
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F
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ill

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level
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October
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13:10 22:9 66:13
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90:19
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36:20
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5:4 7:14 95:14
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7:22 49:18 86:10
R
R

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2:2 3:2 98:1
Radnor
3:4,6
Radnor-Chester
3:5
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47:15
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22:25 23:4 31:13
40:12,13
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80:7
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68:22
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73:16
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81:12
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9:4 44:11 61:24 90:23
referring

1-800-325-3376

8:13 13:3 55:10


refers
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12:23
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46:6 53:11 59:10 63:6
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87:20
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73:4
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98:16
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51:6
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36:24
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63:21 65:6
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45:8
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47:11
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rights
8:10 35:15 45:22
47:23
Rittenhouse
3:4

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Road
3:5
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6:19 7:3 16:22 20:25
26:6,8,12,15 34:4
43:6
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89:13,14 96:2
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94:11
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35:3 36:6 71:7,7
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1-800-325-3376

5:25 14:5,15,16,19
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69:14 70:12,20 71:8
83:5,9 84:2 85:10

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86:8,15 87:7,8,15
91:21 94:4
specific
7:9 14:20 55:21
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81:18

1-800-325-3376

statute
17:16,20,24,24 29:17
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thing

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Page 16
82:24
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40:21,24 41:7 89:9
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205(a)
14:15

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Page 18
206.1
14:16
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