Transcript Mark Traynor IBRC Delaware Chapter 15 04.11.2013

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

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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
Merrill Corporation - New York

www.merrillcorp.com/law

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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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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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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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1-800-325-3376

11:48:38
11:48:39

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MARK TRAYNOR
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.
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10
Q.
With Mr. Wallace we started
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with a discussion of the types of
13:11:58
12
liquidation under Irish law and Mr.
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Wallace narrowed it down to two, one of
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which is a court liquidation and the
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other is a shareholders liquidation.
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the law deals with those slightly
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differently.
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And
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Would you have a
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categorization of this liquidation, the
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IBRC liquidation, is it a court
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liquidation or a shareholders
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liquidation?
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A.
It's a mixture of both.
It
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has elements of court liquidation and has
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elements of what are called the voluntary
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MARK TRAYNOR
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?
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A.
No, I'm not.
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Q.
Are you aware that the
13:12:49
statement of affairs refers to such a
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resolution?
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A.
I can't recall seeing that in
13:13:04
the statement of affairs.
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Q.
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liquidation.
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put IBRC into liquidation?
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A.
13:13:01
Let's deal with this hybrid

Who put, who specifically
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There was a special
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liquidation order signed by the Minister
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For Finance on the 7th of February which
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appointed Mr. Wallace and Mr. Richardson
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as joint special liquidators of IBRC.
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In what capacity did the
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minister put IBRC into liquidation?
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Q.
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MR. WAXMAN:
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answer.
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A.
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Sorry.
Vague.
You can
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The special
liquidation order was as part of section
1-800-325-3376
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MARK TRAYNOR
4 of the IBRC Act that had been passed by
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Parliament on, early in the morning of
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the 7th of February.
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Q.
13:14:04
I'm sorry I probably wasn't
13:14:08
clear with my question.
even a hybrid company into liquidation,
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you must have some standing vis-a-vis
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that company.
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In order to put
In what capacity did the
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-- was the finance minister, was he a
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shareholder, was he a creditor, what
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capacity did he put the company into
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liquidation?
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A.
13:14:26
He was acting in the capacity
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had a had been given to him under the
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powers given by the IBRC Act itself.
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I don't -- to answer your question, I
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don't believe it was as a shareholder or
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as a creditor.
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finance minister as designated under the
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terms of the IBRC Act.
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It was in his role as the
MR. O'NEILL:
I reserve this
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issue.
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have a copy of the IBRC.
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MR. WAXMAN:
1-800-325-3376
So
We will come back when I
Sure.

13:14:29
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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
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normal, let's not talk about this act,
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but in a normal Irish liquidation?
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MR. WAXMAN:
Vague, calls for
13:15:15
Can you be a bit more
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a narrative.
specific in what you're asking the
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witness?
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Q.
13:15:20
What is the position that the
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creditors take vis-a-vis the company
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after a company has either A shareholder
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resolution putting the company into
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liquidation or has applied to the court
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or a creditor has put the company into
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liquidation, the other creditors of the
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company?
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MR. WAXMAN:
Vague.
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understand the question.
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you --
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A.
I don't
But if
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I'm sorry, I don't quite
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understand whether you are talking about
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in the liquidation generally or you're
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talking about the actual procedure to
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place those into liquidation in the first
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instance.
I just am not clear.
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I'm talking about after the
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Q.
company has been placed into liquidation.
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A.
Okay.
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Q.
Let's take a hypothetical
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Oldco is placed
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The creditors of Oldco
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company, Newco or Oldco.
into liquidation.
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have what rights at that point under the
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law?
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MR. WAXMAN:
In which type of
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liquidation are we referring to
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with respect to the two that have
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been identified?
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Q.
A shareholder's and a court's?
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A.
Well first take a creditor's
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voluntary liquidation, and they can
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submit their claims to the liquidator as
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to what they claim to be owed by the
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company in liquidation and can go through
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that claims process with the liquidator
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in terms of that.
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And there is a procedure

whereby in a creditor's voluntary
1-800-325-3376

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MARK TRAYNOR
liquidation there could be a committee of
13:16:40
inspection appointed at the creditors
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meeting, which Mr. Wallace referred to,
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when the company is placed into
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liquidation.
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inspection is typically made up of a
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number of representatives of the creditor
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group and a number of representatives of
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the shareholder group.
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And that committee of
And in a committee of
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inspection position, they would typically
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meet with the liquidator at various times
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during the liquidation.
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time but they have to meet every month or
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so, but that will be arranged with the
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liquidator.
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Q.
A.
There is no committee of
inspection in this case, correct.
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And none of that is happening
in this case; is that correct?
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There's no set
Q.
Nor have the creditors met in
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1-800-325-3376
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this case?
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MR. WAXMAN:
Well that lacks
foundation.

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MARK TRAYNOR
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Q.
Have the creditors met in this
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case?
MR. WAXMAN:
Well they may
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have met and he wouldn't know about
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it.
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Q.
But do you mean -No in terms of the structure
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of the liquidation, have the creditors
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met to approve the appointment of the
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liquidators?
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approve the appointment of the
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liquidators?
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A.
No.
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Q.
And why is that?
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MR. WAXMAN:
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speculation as phrased.
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Q.
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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
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the IBRC Act that says a creditor's
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meeting is to take place.
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Q.
A.
What I'm saying is there is no
provision within the IBRC Act which
1-800-325-3376
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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
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should take place when the company was
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placed into liquidation.
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Q.
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I see.
So that's why there
was not a creditor's meeting?
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A.
Yes.
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Q.
And the same is true with the
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committee of examination as you called
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it?
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A.
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There is no provision within
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the IBRC Act to appoint a committee of
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inspection.
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Q.
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Okay.
A.
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Committee of inspection.
In fact, sorry, just to
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clarify.
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Q.
Yes.
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A.
In fact I think and without
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looking at the --
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Q.
We will do that now.
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A.
-- I think that provision in
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respect of creditors voluntarily winding
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up the appointment of committee of
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inspection has been disapplied by the
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MARK TRAYNOR
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IBRC Act.
Q.
I believe that's correct, yes.
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MR. O'NEILL:
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I have here a
copy which we will put into --
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thank you very much.
Mark this as
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Traynor Exhibit 1.
Very efficient
13:19:07
that we have two copies.

(Traynor Exhibit 1 for
13:19:12
13:19:18
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identification, document titled
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"Exhibit B, Irish Bank Resolution
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Corporation Act 2013.")
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MR. O'NEILL:
And this is
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Traynor Exhibit 2 which is the
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properly marked up copy of the
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Companies Act.
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identification, document, properly
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marked up copy of the Companies
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Act.)
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Q.
So why don't we focus on the
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Companies Act marked up, because I think
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that reflects the limitations of the IBRC
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Act.
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minute.
1-800-325-3376
We will get to the IBRC Act in a
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MR. WAXMAN:
So you're now
referring to Traynor Exhibit 2?
MR. O'NEILL:
Exactly, Traynor
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13:19:47
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Exhibit 2.
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Q.
What other provisions that
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would take place in the normal, let's
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call it more standard liquidation have
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been removed, are prohibited by the IBRC
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Act pursuant to this markup of the
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Companies Act?
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MR. WAXMAN:
I'm going to
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object to the term standard or
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regular or normal because I'm not
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sure that that term can be applied
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to any liquidation.
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asking the witness to answer what
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are the differences between the act
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that was put in place in 2013 and
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the Companies Act, the witness can
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answers that question.
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MR. O'NEILL:
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Q.
But if you're
Let me rephrase.
We have discussed the
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committee of inspection and the creditors
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committee as being eliminated by the IBRC
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MARK TRAYNOR
13:20:58
Act.
What other provisions of a
Companies Act liquidation have been
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eliminated by the IBRC Act?
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Well section 10 of the IBRC
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Act, which I have in front of me, sets
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out a number of the provisions which have
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been disapplied, and there is also
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schedule 1 of the IBRC Act which sets out
13:21:20
certain amendments to the Companies Act.
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A.
10
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13:21:27
through each and every one of those.
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13:21:25
So if you want I can go
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Q.
Would you, please, I would
13:21:30
like to go through those.
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A.
13:21:29
So there's section 205(a) and
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section 206.1 have been disapplied.
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Sections 212 to --
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Q.
Sorry, can I just stop.
I'd
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like to deal with not the section numbers
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but the specific substance of the things
13:21:46
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that have been disapplied, if we could.
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In other words, if we start
13:21:53
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with the Companies Act and we say, okay,
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the jurisdiction of the High Court has
13:22:02
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been removed by the IBRC Act, for
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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
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10
question.
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Q.
13:22:16
I'm asking the question can we
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go through the Companies Act with the
13:22:18
13
IBRC Act side by side and refer to the
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14
Companies Act changes which have been
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made by the IBRC legislation.
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presume to all liquidations in Ireland,
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except this one -- I'll ask a question,
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sorry.
13:22:39
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Because I
Are all liquidations in
13:22:39
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Ireland, except this one, governed by the
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Companies Act?
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A.
Q.
Okay, fine.
So this
liquidation is governed by the Companies
1-800-325-3376
13:22:50
13:22:52
recollection, yes.
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25
Yes, to the best of my

13:22:53
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MARK TRAYNOR
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
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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.
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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
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IBRC.
13:23:39
Is there anything else
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in 212, the whole act, is there anything
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else besides the restriction of the High
13:23:46
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Court's role in this liquidation?
13:23:49
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Q.
Okay.
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A.
Not under 212.
13:23:51
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Q.
Okay.
13:23:52
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to 214.
1-800-325-3376
And let's move on then
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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
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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.
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21
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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
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has the effect of amending the
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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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MARK TRAYNOR
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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13:26:59
13:27:01

Page 20
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MARK TRAYNOR
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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Page 21
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2
MARK TRAYNOR
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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Page 22
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MARK TRAYNOR
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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13:30:03
13:30:15
13:30:18
13:30:21

Page 23
1
MARK TRAYNOR
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
1-800-325-3376

13:31:16
13:31:21

Page 24
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MARK TRAYNOR
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


Page 25
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MARK TRAYNOR
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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13:33:54
13:33:58
13:33:59

Page 26
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MARK TRAYNOR
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

13:34:50

Page 27
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MARK TRAYNOR
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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Page 28
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MARK TRAYNOR
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
1-800-325-3376
13:36:52

13:36:56
13:36:58

Page 29
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MARK TRAYNOR
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
1-800-325-3376
A.
Yes, because it was not a

13:37:59

Page 30
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2
MARK TRAYNOR
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

13:38:50
13:38:52
13:38:55

Page 31
1
MARK TRAYNOR
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?

13:39:38
13:39:38

Page 32
1
MARK TRAYNOR
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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Page 33
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MARK TRAYNOR
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

13:41:06
13:41:37

Page 34
1
MARK TRAYNOR
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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Page 35
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MARK TRAYNOR
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.


Page 36
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MARK TRAYNOR
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?
1-800-325-3376

13:45:21
13:45:26

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MARK TRAYNOR
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

13:46:53

Page 38
1
MARK TRAYNOR
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


Page 39
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MARK TRAYNOR
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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Page 40
1
MARK TRAYNOR
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


Page 41
1
MARK TRAYNOR
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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MARK TRAYNOR
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
1-800-325-3376


Page 43
1
MARK TRAYNOR
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


Page 44
1
2
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.
1-800-325-3376


Page 45
1
MARK TRAYNOR
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

13:56:14
13:56:18
13:56:19

Page 46
1
MARK TRAYNOR
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

13:57:50

Page 47
1
MARK TRAYNOR
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
13:58:59
25
MR. WAXMAN:
1-800-325-3376
Can a Greek citizen
13:58:53
22
I understand

13:59:02

Page 48
1
MARK TRAYNOR
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

13:59:59

Page 49
1
MARK TRAYNOR
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
1-800-325-3376


Page 50
1
MARK TRAYNOR
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
1-800-325-3376
A.
The application of section 8

14:02:12

Page 51
1
MARK TRAYNOR
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


Page 52
1
MARK TRAYNOR
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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MARK TRAYNOR
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

14:05:04

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MARK TRAYNOR
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

14:06:48
14:06:52

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MARK TRAYNOR
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
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For instance, I


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MARK TRAYNOR
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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MARK TRAYNOR
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

14:24:06

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MARK TRAYNOR
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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MARK TRAYNOR
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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MARK TRAYNOR
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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MARK TRAYNOR
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
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Just give him the


Page 64
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MARK TRAYNOR
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

14:28:36

Page 65
1
MARK TRAYNOR
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

14:29:29
14:30:03
14:30:06

Page 66
1
MARK TRAYNOR
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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2
MARK TRAYNOR
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

14:32:46

Page 68
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MARK TRAYNOR
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


Page 69
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2
MARK TRAYNOR
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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14:35:35

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MARK TRAYNOR
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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MARK TRAYNOR
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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MARK TRAYNOR
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

14:38:49

Page 73
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2
MARK TRAYNOR
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.
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MARK TRAYNOR
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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2
MARK TRAYNOR
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


Page 76
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MARK TRAYNOR
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

14:42:44

Page 77
1
MARK TRAYNOR
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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14:43:34
14:43:35

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MARK TRAYNOR
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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Page 79
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MARK TRAYNOR
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

14:46:56

Page 80
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MARK TRAYNOR
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
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Page 81
1
MARK TRAYNOR
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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Page 82
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2
MARK TRAYNOR
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
1-800-325-3376

14:50:42
14:50:43
14:50:46

Page 83
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MARK TRAYNOR
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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Page 84
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MARK TRAYNOR
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.

14:52:49
14:52:51

Page 85
1
MARK TRAYNOR
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
14:53:43
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Page 86
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2
MARK TRAYNOR
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.

14:55:07
14:55:08

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MARK TRAYNOR
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
1-800-325-3376
I don't believe that

14:56:13

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2
MARK TRAYNOR
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
1-800-325-3376


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1
MARK TRAYNOR
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.

14:57:51
14:57:55
14:57:57

Page 90
1
MARK TRAYNOR
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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MARK TRAYNOR
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

15:00:00
15:00:01

Page 92
1
MARK TRAYNOR
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
1-800-325-3376

15:00:49
15:00:51

Page 93
1
MARK TRAYNOR
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
1-800-325-3376


Page 94
1
MARK TRAYNOR
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:


Page 95
1
MARK TRAYNOR
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

15:03:15
15:03:19

Page 96
1
MARK TRAYNOR
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
1-800-325-3376

15:19:17

Page 97
1
2
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


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


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
12
identification, document
13
titled "Exhibit B, Irish
14
Bank Resolution Corporation
15
Act 2013.")
16
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


Page 1
A
ability
23:6 35:21 44:6 74:6
79:4 84:17 85:4 86:5
86:7,16 92:19 95:18
able
29:4 85:13 90:10
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23:3
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84:10
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53:3
accusations
59:23
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59:13,20
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67:14
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6:2,16,21 7:5 10:18,20
10:25 11:12 12:2,12
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13:10,11,18,20 14:2
14:3,4,6,9,10,23,25
15:12,13,14,21 16:2
16:2,5,8,9,20 17:22
18:2 19:5,11,12
20:23 22:14,20 25:5
25:14 30:8 35:17
36:12,23 37:5 42:6,7
43:24 44:11,13,23
45:17 46:16,19 49:15
49:17,21,23 50:3,8
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54:9 56:9,14 57:18
57:19 67:19,21 71:24
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79:4 80:4,11,14,19
81:2 84:6,13,20 85:5
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91:19,23 92:9,18
93:2,4,7,14,22,23
94:8,23 99:15,19
acting
1-800-325-3376
6:14
action
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90:11 98:16
actions
46:5 51:23 52:3 62:3
63:13,20 87:5,6,14
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70:21
acts
17:8 44:16 62:7
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7:25
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41:25
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53:18 73:12,22
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70:23
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70:3
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70:8
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43:17 49:6
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5:8,11 27:24 31:14,17
32:25 33:3,20 53:18
95:3
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4:8,9 65:3
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62:17 71:6
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33:25 92:12
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96:5
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26:21 66:25 85:16
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25:21
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60:3,10,20 61:8
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77:8
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39:12 64:2
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44:23
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16:9
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28:9 73:19
ambit
63:19
amended
16:2 17:14,21 19:11
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17:25
amendments
14:10 16:6
American
89:23
ANDREW
3:10
and/or
63:11
Angeles
2:5
Anglo
41:19 61:7 63:11
66:18,18 68:20
ANNIE
2:7
annie.li@skadden.c...
2:9
annul
23:7,12,17 37:19
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37:8,13 38:3
answer
5:23 6:17 13:17 26:20
40:24 41:9 42:15
48:6,9 60:24 61:3
64:16 65:13 68:2
70:5,16 75:12,17
77:8 78:18,20 80:17
85:17 90:3 99:24
answered
65:13
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40:22 43:20 63:23
answers
13:21 48:5
Antecedent
39:23
anyone's
21:21
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20:12
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27:4 50:11 67:3 69:5
91:17
applicable
25:3,5 34:13
application
17:11 23:7 36:13
49:20 50:23,25 51:15
54:13 82:16 87:22
93:17
applications
54:6,8 55:11 82:14,20
82:23 83:5,9,22,25
84:4
applied
7:15 13:15
applies
51:2 84:10
apply
17:15 19:13,16 21:12
21:16,18 23:16 25:15
26:2,13,22,25 28:5,6
28:18,24 31:5 34:10
34:25 35:4,10,13,21
35:25 38:25 51:11,14
79:18 84:12 96:6
applying
52:25
appoint
11:12 22:14,17
appointed
5:18 9:3 28:22 33:6,10
59:15 85:20 93:11,19
95:21
appointment


Page 2
10:9,11 11:24 19:17
22:6 33:14 64:20
93:25
appoints
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appreciate
65:18
appropriate
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approval
21:21
approve
10:9,11
approximately
33:8
argument
46:9
arising
26:23 36:9,20
Arps
1:11 2:3
arranged
9:16
arrangements
91:5
asked
41:24 43:13 65:5,12
69:24 70:7 71:8
80:21 82:13 83:20
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asking
7:9 13:17 15:9,11 19:9
40:11 41:8 63:5,22
70:6 72:12 75:11
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assessed
87:24
asset
51:25,25
assets
40:3 42:4 46:6 68:14
75:14 78:11,22 79:9
79:10,11,17,20 82:2
assisted
1-800-325-3376
79:23
associated
81:24
ASSOCIATES
2:10
assume
59:20
attempt
28:10,16
attempting
51:8
attempts
54:2
attention
67:22 78:5
attorney
48:21 49:3,3 51:21
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Attorneys
2:3,11,15 3:3
available
80:24 83:22
Avenue
2:4,11
avoid
42:7
avoiding
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40:5,11 42:5,10
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B
B
12:11 45:13 74:13
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back
6:23 27:21 44:18

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background
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backwards
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bank
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BANKRUPTCY
1:2
banks
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bar
38:23
bars
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basically
45:15 90:2,3
basis
34:15 59:22 68:22
Bear
49:25
bearing
93:21
beginning
21:25 68:18 69:22
behalf
59:4,5 60:4
belief
91:20
believe
6:18 12:3 20:2,4,9,19
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31:19,21 32:13,15
33:4 45:21 50:19
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74:10 80:10 84:25
87:24 88:19
benefit
80:6
best
15:22 41:10
better
71:19
bit
7:8
blood
98:17
bond
75:18
bonds
75:11,15 77:3
books
39:12,17
borrower
91:8
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55:25 80:25 88:11
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Building
66:12
business
76:8,15,21,24


Page 3
certainly
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competent


Page 4
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Page 5
deal
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enactments
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Page 6
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forth


Page 7
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Page 8
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KPMG
64:23


Page 9
level
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8:9,13,18,21 9:2,6,14
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17:3,18 19:6 21:2,15
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42:8,13 43:6 54:15
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1-800-325-3376
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72:25
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67:23 78:11,22 79:10
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68:9,14,15,20,24
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57:14,15
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12:15,19,22 69:4
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98:17
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66:18 98:18
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81:14,22
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1:12 2:3
mean
10:6 33:5 46:11 53:5
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17:5 36:7,10,14,22
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93:11
meetings
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24:13,22 25:4,13,15
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1-800-325-3376
60:6,8
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89:22 93:4
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36:16 62:16 90:16
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66:12
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9:22 10:2,5,9,10
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70:15 88:4 93:21
minister
5:16,21 6:10,20 23:13
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24:2
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12:25 20:4 26:18
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56:2
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23:14 30:25
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4:23
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34:21,22 38:13 93:22
modifications
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34:20 35:12
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39:20 59:9
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43:9 65:10
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41:14,16,18 42:2
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obviously
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83:11
occurred
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Page 11
October
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offense
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office
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okay
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1-800-325-3376
ordinarily
24:18,20
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overridden
80:9
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O'LEARY
3:10
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2:15,18 4:7 6:22 12:4
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39:13,17 62:20 66:15
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36:24
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Parliament
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54:23
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77:15
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56:21
play
7:4
PLC


Page 12
66:19 67:11
please
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plumbing
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plus
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point
8:10 27:6 50:18 72:6
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72:7
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predecessors
69:20
predict
94:25
1-800-325-3376
preference
42:21,24 44:2 46:13
present
3:9 18:6 40:14 68:11
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R
R


Page 13
2:2 3:2 98:1
Radnor
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rights
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Rittenhouse
3:4


Page 14
Road
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6:19 7:3 16:22 20:25
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89:13,14 96:2
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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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8:16
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67:12
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3:11
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38:21
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87:13
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66:12
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24:3,7,18,21,25 28:25
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69:14 70:12,20 71:8
83:5,9 84:2 85:10


Page 15
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91:21 94:4
specific
7:9 14:20 55:21
specifically
5:13 36:8 55:14 56:12
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speculating
73:24
speculation
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Square
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53:21,22 77:12
Stabilization
67:21
stand
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13:8,13 17:10,13
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14:22 16:13,14 41:9
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5:8,11 27:22,24 31:13
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States
1:2 78:12 79:10,16
81:18
1-800-325-3376
statute
17:16,20,24,24 29:17
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67:8
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22:23 91:23
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75:19
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87:19
Subscribed
96:12 97:20
subsection
37:25
subsequent
33:25
substance
14:20 16:10
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2:11,16 3:5
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53:16
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9


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Transcript Mark Traynor IBRC Delaware Chapter 15 04.11.2013

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In The Matter Of:

In re: THE IRISH BANK RESOLUTION CORPORATION

MARK TRAYNOR - 11/4/2013

IN THE UNITED STATES BANKRUPTCY COURT

Merrill Corporation - New York

MARK TRAYNOR - 11/4/2013

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

ERIC S. WAXMAN, ESQ.

LEONARD ZACK & ASSOCIATES

LEONARD ZACK, ESQ.

O'NEILL & COMPANY

LAWRENCE DANIEL O'NEILL, ESQ.

Merrill Corporation - New York

MARK TRAYNOR - 11/4/2013

LAW OFFICES OF DORON A. HENKIN, ESQ.

DORON A. HENKIN, ESQ.

Merrill Corporation - New York

MARK TRAYNOR - 11/4/2013

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:

EXAMINATION BY MR. O'NEILL:

With Mr. Wallace we started

with a discussion of the types of

liquidation under Irish law and Mr.

Wallace narrowed it down to two, one of

which is a court liquidation and the

other is a shareholders liquidation.

the law deals with those slightly

Would you have a

categorization of this liquidation, the

IBRC liquidation, is it a court

It's a mixture of both.

has elements of court liquidation and has

elements of what are called the voluntary

Merrill Corporation - New York

MARK TRAYNOR - 11/4/2013

Are you aware of a

shareholders resolution putting IBRC into

liquidation on the 6th of February?

No, I'm not.

Are you aware that the

statement of affairs refers to such a

I can't recall seeing that in

the statement of affairs.

put IBRC into liquidation?

Let's deal with this hybrid

There was a special

liquidation order signed by the Minister

For Finance on the 7th of February which

appointed Mr. Wallace and Mr. Richardson

as joint special liquidators of IBRC.

In what capacity did the

minister put IBRC into liquidation?

liquidation order was as part of section

Merrill Corporation - New York

MARK TRAYNOR - 11/4/2013

4 of the IBRC Act that had been passed by

Parliament on, early in the morning of

the 7th of February.

I'm sorry I probably wasn't

clear with my question.