Future of Social Media Presentation from 2015 IBRC Future of Social Congress
Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
-
Upload
quinnanglo -
Category
Documents
-
view
229 -
download
0
Transcript of Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
1/118
In The Matter Of:
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
2/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
-----------------------------------xIn 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
10:06 a.m.
Deposition of KIERAN WALLACE, 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.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
3/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 2
1
2 A P P E A R A N C E S:
3 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for The Irish Bank Resolution4 Corporation Limited
300 South Grand Avenue
5 Los Angeles, CA 90071-3144
6 BY: ERIC S. WAXMAN, ESQ.
VAN C. DURRER II, ESQ.
7 -and- ANNIE Z. LI, ESQ.
8 ([email protected]) ([email protected])
10LEONARD ZACK & ASSOCIATES
11 Attorneys for the Flynn Parties
405 Park Avenue, Suite 100112 New York, NY 10022
13 BY: LEONARD ZACK, ESQ.
15 O'NEILL & COMPANY
Attorneys for the Flynn Parties16 240 Central Park South
Suite 23D17 New York, NY 10019
18 BY: LAWRENCE DANIEL O'NEILL, ESQ.
20
21
22
23
24
25
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
4/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 3
1
2 A P P E A R A N C E S (Continued):
3 11:48:3LAW OFFICES OF DORON A. HENKIN, ESQ.
Attorneys for Castleway Properties LLC4 11:48:3and Walnut Rittenhouse LP
Radnor Financial Center
5 150 N. Radnor-Chester Road Suite F200
6 Radnor, PA 19087
7 BY: DORON A. HENKIN, ESQ. ([email protected])
8
9 ALSO PRESENT:
LEONA FLYNN10 JOHN FLYNN
ANDREW O'LEARY
11 MARK TRAYNORJAMES SHEEHAN
12
13
14
15
16
17
18
19
20
21
22
23
24
25
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
5/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 4
1 KIERAN WALLACE
2 KIERAN WALLACE, called as a
3 witness, having been first duly
4 sworn by the Notary Public (Mark
5 Richman), was examined and
6 testified as follows:
7 10:06:2 EXAMINATION BY MR. O'NEILL:
8 10:06:2 Q. All right. Good morning.
9 10:06:2 A. Good morning.
10 10:06:2 Q. Can you tell me under the
11 10:06:3Companies Act in Ireland, what would be
12 10:06:3the normal process for a company's
13 10:06:4liquidation?
14 10:06:42 MR. WAXMAN: Calls for a legal
15 10:06:43 conclusion. You may answer.
16 10:06:45 A. There are two ways in which a
17 10:06:4company can go into liquidation in
18 10:06:5Ireland. One is by creditors voluntary
19 10:06:5liquidation and the other is by way of
20 10:06:5court liquidation. And then there's
21 10:07:02members voluntary liquidations for
22 10:07:05solvent companies, and all of those
23 10:07:0processes are governed by the company.
24 10:07:13 Q. I'm looking at the process.
25 10:07:1So it starts, A, someone, and in this
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
6/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 5
1 KIERAN WALLACE
2 10:07:1case either the shareholders, the
310:07:2
directors or a creditor, decides to put
4 10:07:23the company into liquidation. And then
5 10:07:25what happens? What is the exact process
6 10:07:2that's followed? In a normal case? I'm
7 10:07:3sorry, he has done over 200 liquidations.
8 10:07:35 MR. WAXMAN: No, I know that
9 10:07:3 but you're calling for a long
10 10:07:3 narrative answer which is
11 10:07:3 inappropriate. You want to break
12 10:07:4 it down a little bit.
13 10:07:42 Q. So someone applies to the
14 10:07:45court to liquidate the company? Is that
15 10:07:4what happens?
16 10:07:4 A. Possible.
17 10:07:5 Q. Is there another way to
18 10:07:52liquidate a company besides applying to
19 10:07:5the court?
20 10:07:5 A. Yes, there's by way of
21 10:07:5shareholders resolution.
22 10:07:5 Q. The shareholders resolution,
23 10:08:0and the shareholders resolution can
24 10:08:02liquidate a solvent company?
25 10:08:0 A. Correct.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
7/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 6
1 KIERAN WALLACE
2 10:08:05 MR. WAXMAN: Calls for a legal
310:08:0
conclusion. You may answer.
4 10:08:0 A. Correct.
5 10:08:0 Q. So for the process, let's take
6 10:08:12a shareholders resolution for
7 10:08:13liquidation. The shareholders pass a
8 10:08:1resolution saying we don't want to do
9 10:08:1this business any more, the company is
10 10:08:22solvent but we don't want to do this
11 10:08:23business any more and they pass a
12 10:08:25resolution liquidating the company.
13 10:08:2Someone then appoints you? Or they just
14 10:08:2dissolve the company? Someone appoints a
15 10:08:3liquidator?
16 10:08:32 MR. WAXMAN: The question is
17 10:08:33 how is a liquidator generally
18 10:08:35 appointed?
19 10:08:35 Q. Must there be a liquidator
20 10:08:3appointed or can they just liquidate the
21 10:08:3company on their own?
22 10:08:4 MR. WAXMAN: Vague.
23 10:08:4 Q. The shareholders?
24 10:08:4 MR. WAXMAN: If you understand
25 10:08:42 the question you can answer.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
8/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 7
1 KIERAN WALLACE
2 10:08:43 A. Can you rephrase the question.
310:08:4
I'm not sure I understand the question
4 10:08:45you're asking.
5 10:08:4 Q. There's a group of
6 10:08:4shareholders, I hold a shareholders
7 10:08:5meeting, I pass a resolution to cease
8 10:08:53doing business and to liquidate the
9 10:08:5company. Must I appoint a liquidator?
10 10:09:0 A. You must seek to try to
11 10:09:02appoint a liquidator, yes.
12 10:09:03 Q. Must I apply to the court to
13 10:09:05appoint a liquidator or may I hire my own
14 10:09:0liquidator?
15 10:09:0 A. You can hire your own
16 10:09:12liquidator.
17 10:09:13 Q. Without applying to the court?
18 10:09:15 A. Correct.
19 10:09:15 Q. Okay. And does that -- what
20 10:09:1is that liquidator's relationship to the
21 10:09:2court, if any, and to creditors of the
22 10:09:22company?
23 10:09:2 MR. WAXMAN: Compound. You
24 10:09:25 can answer.
25 10:09:3 A. There is a general obligation
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
9/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 8
1 KIERAN WALLACE
2 10:09:3on behalf of the liquidator to realize
310:09:3
the assets for the benefit of the
4 10:09:3creditors. But that liquidator always is
5 10:09:45in the key role of realizing the assets
6 10:09:4and distributing among creditors.
7 10:09:52 Q. And what if the shareholders
8 10:09:5dispute the method, the way the
9 10:09:5liquidator is proceeding with the
10 10:09:5liquidation, may they replace him with
11 10:10:0another liquidator? Without going to the
12 10:10:03court?
13 10:10:0 A. Yes, they can.
14 10:10:0 Q. So they can fire him and hire
15 10:10:1another liquidator? So the shareholders
16 10:10:13are completely in control of that entire
17 10:10:15process, there is no court supervision of
18 10:10:1that liquidation?
19 10:10:1 MR. WAXMAN: In that
20 10:10:1 particular type of proceeding?
21 10:10:2 Q. Of a solvent company, of a
22 10:10:22solvent company?
23 10:10:23 A. Correct.
24 10:10:2 Q. Okay. Now let's say the
25 10:10:2company is insolvent, the shareholders,
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
10/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 9
1 KIERAN WALLACE
2 10:10:3same scenario, hold a meeting, pass a
310:10:33
resolution and put the company into
4 10:10:3liquidation. Who then appoints the
5 10:10:3liquidator in an insolvent company?
6 10:10:4 A. There are two methods.
7 10:10:45Shareholders can appoint or the court can
8 10:10:4appoint.
9 10:10:4 Q. Okay. And if the shareholders
10 10:10:5appoint, is there someone that needs to
11 10:10:52approve that appointment in an insolvent
12 10:10:5company? In other words, does the court
13 10:10:5need to approve that appointment or can
14 10:11:0the shareholders choose a liquidator and
15 10:11:02appoint the liquidator to liquidate the
16 10:11:0company?
17 10:11:0 A. The shareholders can nominate
18 10:11:0a liquidator in an insolvent company.
19 10:11:12 Q. Right.
20 10:11:12 A. But there must be a following
21 10:11:1meeting of the creditors at which the
22 10:11:15creditors concur with that nomination.
23 10:11:1 Q. And if the creditors do not
24 10:11:2concur?
25 10:11:2 A. Then they can appoint their
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
11/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 10
1 KIERAN WALLACE
2 10:11:23own liquidator.
310:11:23
Q. They will appoint their own,
4 10:11:2so there will be two liquidators
5 10:11:2appointed?
6 10:11:2 A. No.
7 10:11:2 Q. So the shareholders'
8 10:11:2liquidator is supplanted by the
9 10:11:3liquidator appointed by the creditors?
10 10:11:33 A. That is correct.
11 10:11:35 Q. So, all right, now how long
12 10:11:42has KPMG been retained by the finance
13 10:11:45minister with regard to IBRC?
14 10:11:4 MR. WAXMAN: You can answer.
15 10:11:5 A. Myself and Mr. Richardson got
16 10:11:5appointed on the 7th of February 2013.
17 10:12:0 Q. I understand that. I mean
18 10:12:0KPMG, not yourself and Mr. Richardson,
19 10:12:0the firm of KPMG?
20 10:12:1 A. KPMG have never been appointed
21 10:12:12by the minister.
22 10:12:13 Q. Not as liquidators, but has
23 10:12:1been retained as an advisor to the
24 10:12:1government, never? So KPMG never worked,
25 10:12:1never worked for the Irish government
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
12/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 11
1 KIERAN WALLACE
2 10:12:2with regard to IBRC?
310:12:23
MR. WAXMAN: Well I'm going to
4 10:12:2 interpose an objection here that
5 10:12:2 anything that occurred prior to
6 10:12:2 February is not within the proper
7 10:12:3 scope of discovery pursuant to the
8 10:12:3 court's order. I'll give you a
9 10:12:33 little latitude here. But I want
10 10:12:3 to set down that time constraint
11 10:12:3 pursuant to the court's order very
12 10:12:3 early on.
13 10:12:43 MR. O'NEILL: I understand
14 10:12:4 that but this is relevant to
15 10:12:45 something very important.
16 10:12:4 MR. WAXMAN: Whether it is
17 10:12:4 relevant or not, the court has set
18 10:12:4 the relevant time for discovery and
19 10:12:5 that is post-February 2013. I'll
20 10:12:55 give you a little latitude here.
21 10:12:5 So I'll allow you to answer that
22 10:12:5 question. But as a general matter
23 10:13:0 we are not going to be inquiring as
24 10:13:02 to matters before February.
25 10:13:0 A. Can you rephrase your
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
13/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 12
1 KIERAN WALLACE
2 10:13:0question?
310:13:0
Q. Okay. Was KPMG retained at
4 10:13:1any point by the Irish government --
5 10:13:15 MR. WAXMAN: Lacks foundation.
6 10:13:1 Q. -- with regard to the
7 10:13:2liquidation of IBRC prior to your
8 10:13:23appointment as special liquidator?
9 10:13:2 MR. WAXMAN: Lacks foundation.
10 10:13:2 You may answer.
11 10:13:2 A. No.
12 10:13:3 Q. No. So that KPMG was not
13 10:13:3appointed as advisor to the Irish
14 10:13:3government on the 12th of October, 2012?
15 10:13:4 A. No.
16 10:13:4 Q. Fine. All right. Now, are
17 10:13:4you familiar at all with the nature of
18 10:13:5the promissory notes that were issued by
19 10:13:53the Minister of Finance to Anglo Irish
20 10:13:5Bank/IBRC?
21 10:13:5 A. No.
22 10:14:0 Q. You have no knowledge of those
23 10:14:02notes?
24 10:14:05 A. I'm aware of them.
25 10:14:0 Q. Did you know anything about
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
14/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 13
1 KIERAN WALLACE
2 10:14:0them, the nature of them?
310:14:1
A. No.
4 10:14:1 Q. Are you aware that they were
5 10:14:13issued by the government in payment for
6 10:14:15the shares that the government acquired
7 10:14:1in Anglo Irish Bank?
8 10:14:2 A. Yes, I understand that to be
9 10:14:2the case.
10 10:14:2 Q. Okay. And do you understand
11 10:14:2the basis under which the government
12 10:14:2rescinded those promissory notes?
13 10:14:3 A. No.
14 10:14:3 Q. Okay. So you have no
15 10:14:3knowledge at all about why the government
16 10:14:3or how the government rescinded the
17 10:14:3financial obligation to the bank?
18 10:14:3 A. No.
19 10:14:4 Q. Wouldn't it be normal if you
20 10:14:43were appointed as a liquidator to a
21 10:14:4company where a shareholder had made a
22 10:14:52contractual obligation to pay for shares
23 10:14:5with cash and terminated unilaterally
24 10:15:03that contract, wouldn't it be of interest
25 10:15:0to the liquidator to determine the nature
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
15/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 14
1 KIERAN WALLACE
2 10:15:0of that termination and what the
310:15:1
obligation may be upon the part of that
4 10:15:15shareholder vis-a-vis that obligation to
5 10:15:1the company?
6 10:15:1 MR. WAXMAN: Counsel, that's a
7 10:15:1 speech, not a question. Can you
8 10:15:1 break it down.
9 10:15:2 MR. O'NEILL: I'm just asking.
10 10:15:23 Okay.
11 10:15:23 Q. Would you not in a normal
12 10:15:2liquidation be interested in inquiring as
13 10:15:2to the nature of obligations that third
14 10:15:3parties had to the company?
15 10:15:33 MR. WAXMAN: Incomplete
16 10:15:3 hypothetical. You can answer.
17 10:15:35 A. Yes.
18 10:15:3 Q. Okay. And why did you not
19 10:15:3inquire into the nature of the
20 10:15:3termination of the promissory notes?
21 10:15:4 A. I didn't say that.
22 10:15:4 Q. Did you inquire into the
23 10:15:4nature of the termination of the
24 10:15:5promissory notes? I asked you if you
25 10:15:52understood the nature of the promissory
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
16/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 15
1 KIERAN WALLACE
2 10:15:5notes and the termination of it, you said
310:15:55
no.
4 10:15:5 Did you, did you inquire into
5 10:15:5the nature of the termination of the
6 10:15:5promissory notes?
7 10:16:0 A. As liquidators, I am happy
8 10:16:0that the issue around the promissory
9 10:16:1notes has been properly dealt with.
10 10:16:1 Q. So you have determined, just
11 10:16:1to clarify to my mind, you have
12 10:16:1determined that the government's
13 10:16:2obligation under the promissory notes
14 10:16:23could be terminated unilaterally by the
15 10:16:25government?
16 10:16:3 A. I've taken legal advice on
17 10:16:33that point.
18 10:16:33 Q. And that legal advice is?
19 10:16:3 MR. WAXMAN: Instruct the
20 10:16:3 witness not to answer. You're not
21 10:16:3 getting into attorney-client
22 10:16:3 privileged information here,
23 10:16:4 counsel.
24 10:16:5 Q. When you looked at these notes
25 10:16:53I presume in making this inquiry as to
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
17/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 16
1 KIERAN WALLACE
2 10:16:55the nature of the promissory notes, do
310:16:5
you know how much the promissory notes
4 10:17:0were for?
5 10:17:03 A. I don't recall at the moment.
6 10:17:05 Q. Okay. The statement of
7 10:17:0affairs notes that the promissory notes
8 10:17:1were for 35 billion. Does that strike a
9 10:17:12bell, approximately?
10 10:17:15 A. I don't recall.
11 10:17:1 Q. The promissory notes, when you
12 10:17:2looked at this, were used as collateral
13 10:17:2for a loan made to the bank by the
14 10:17:32Central Bank; is that not correct?
15 10:17:3 A. That is my understanding.
16 10:17:3 Q. Okay. Now if the bank had
17 10:17:42collateral in the promissory notes, why
18 10:17:45do you suppose the bank was -- took out a
19 10:17:4security in the assets of the bank as
20 10:17:5well on the 12th of October, 2012?
21 10:17:53 MR. WAXMAN: Calls for
22 10:17:5 speculation, lacks foundation.
23 10:17:5 Q. Are you aware that the bank,
24 10:17:5that the Central Bank took out a
25 10:18:03security, registered a security against
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
18/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 17
1 KIERAN WALLACE
2 10:18:0the assets of IBRC on the 12th -- on the
310:18:0
18th of October?
4 10:18:0 A. Yes.
5 10:18:0 Q. 2012. Okay.
6 10:18:1 MR. WAXMAN: Just as a
7 10:18:15 caution, it's sometimes hard to
8 10:18:1 tell if the lawyer finished asking
9 10:18:1 the question and the reporter can
10 10:18:1 only take down one person talking
11 10:18:2 at a time. So the best way to make
12 10:18:22 sure he's completed his question is
13 10:18:2 to pause, make sure he's done and
14 10:18:2 then you can answer.
15 10:18:2 Q. So from your previous
16 10:18:3testimony I'm going to presume that KPMG
17 10:18:33was not involved in advising the
18 10:18:35government when this charge was taken,
19 10:18:4when this security was registered?
20 10:18:42 MR. WAXMAN: Is that a
21 10:18:42 question or are you just telling us
22 10:18:4 what your presumption is?
23 10:18:4 MR. O'NEILL: That's a
24 10:18:4 question.
25 10:18:4 Q. Was KPMG involved in advising
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
19/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 18
1 KIERAN WALLACE
2 10:18:4the government when this security was
310:18:5
registered?
4 10:18:52 MR. WAXMAN: Lacks foundation.
5 10:18:53 You can answer.
6 10:18:53 A. No.
7 10:18:5 Q. When was it decided that IBRC
8 10:19:0would be liquidated?
9 10:19:1 A. When the government passed the
10 10:19:1act in the early hours of the 7th of
11 10:19:1February, 2013.
12 10:19:2 Q. I presume, though, that there
13 10:19:22was some decision making before that?
14 10:19:2Are you aware of any decision making
15 10:19:2before the legislation was drafted? It
16 10:19:2didn't come out of whole cloth. So
17 10:19:3before that --
18 10:19:33 MR. WAXMAN: Well, counsel,
19 10:19:3 again the time limit for this
20 10:19:3 deposition is post-February. So I
21 10:19:4 just want to make sure we're in
22 10:19:4 that, in the appropriate time
23 10:19:43 period here. Let's have the
24 10:19:45 question back.
25 10:19:5 (The requested portion of the
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
20/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 19
1 KIERAN WALLACE
2 10:19:5 record was read.)
310:19:5
MR. WAXMAN: Lacks foundation
4 10:19:5 too, but go ahead and answer the
5 10:19:5 question.
6 10:20:0 A. Yes, there was.
7 10:20:03 Q. And were you involved in that
8 10:20:0decision making?
9 10:20:0 A. No.
10 10:20:1 Q. Can you tell me who was
11 10:20:12involved? Do you know who was involved
12 10:20:1in that decision?
13 10:20:15 A. The government were involved.
14 10:20:1 Q. Do you know who drafted the
15 10:20:1IBRC Act?
16 10:20:22 A. No.
17 10:20:25 Q. Do you know who organized --
18 10:20:2who developed the financial structure of
19 10:20:32the liquidation of IBRC?
20 10:20:3 MR. WAXMAN: Vague.
21 10:20:3 A. Yes.
22 10:20:3 Q. Was it KPMG?
23 10:20:4 A. No.
24 10:20:4 Q. It was not yourselves?
25 10:20:42 A. No.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
21/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 20
1 KIERAN WALLACE
2 10:20:43 Q. Can you tell me who it was?
310:20:4
MR. WAXMAN: If you know.
4 10:20:4 A. Department of Finance.
5 10:20:4 Q. By themselves?
6 10:20:5 A. Correct.
7 10:20:5 Q. When were you first asked to
8 10:20:5be a special liquidator to liquidate the
9 10:21:0bank?
10 10:21:0 A. Late October 2012.
11 10:21:2 Q. Late October 2012. And at the
12 10:21:3time you were asked what was your role?
13 10:21:3From that time until the 7th of February,
14 10:21:3what was your role?
15 10:21:3 A. No role.
16 10:21:3 Q. No role. That's all, no
17 10:21:4advisory, no consultation, no vetting of
18 10:21:4plans or materials, no role?
19 10:21:52 MR. WAXMAN: Compound.
20 10:21:52 Q. I just want to clarify no role
21 10:21:5at all, no discussions with anyone, you
22 10:21:5just waited?
23 10:21:5 A. There were discussions.
24 10:21:5 Q. Okay. And the discussions
25 10:22:0were?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
22/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 21
1 KIERAN WALLACE
2 10:22:0 A. Just general in nature.
310:22:05
Q. I'm a little troubled. Okay.
4 10:22:12So the discussions were about the
5 10:22:1liquidation of the bank in October, late
6 10:22:1October of 2012.
7 10:22:2 A. Can you rephrase again.
8 10:22:22 Q. With the government, you had
9 10:22:23discussions with the government about the
10 10:22:25liquidation in late October 2012?
11 10:22:3 A. I wouldn't say I had
12 10:22:3discussions, no.
13 10:22:35 Q. Were you part of the planning
14 10:22:3of the liquidation in October 2012?
15 10:22:4 MR. WAXMAN: Asked and
16 10:22:42 answered. Counsel, February 2013.
17 10:22:4 I'm cutting you off now. You need
18 10:22:4 to stay in the period that the
19 10:22:4 court indicated was relevant for
20 10:22:5 discovery.
21 10:23:0 Q. Now, do you know why the
22 10:23:0government liquidated the bank?
23 10:23:0 A. No.
24 10:23:1 Q. So you're not privy to any
25 10:23:1decisions by the government on that?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
23/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 22
1 KIERAN WALLACE
2 10:23:15 A. No.
310:23:1
Q. Are you privy to any
4 10:23:22discussions as to why this liquidation
5 10:23:25happened so precipitously?
6 10:23:2 MR. WAXMAN: It's
7 10:23:2 argumentative as phrased. You can
8 10:23:3 answer.
9 10:23:3 A. No.
10 10:23:3 Q. You were contacted -- when
11 10:23:3were you contacted and told that the
12 10:23:3liquidation was going to happen?
13 10:23:43 A. You asked your questions --
14 10:23:5can you ask your question again.
15 10:23:5 Q. When were you told that you
16 10:23:52were going to assume the role of special
17 10:23:5liquidator? You were told in October of
18 10:23:52012 that you were going to be appointed,
19 10:23:5that the government was going to
20 10:23:5liquidate the bank and they wanted you
21 10:24:0and Mr. Richardson to be spec
22 10:24:03liquidators.
23 10:24:03 MR. WAXMAN: Counsel, that's
24 10:24:05 not his testimony so don't recast
25 10:24:0 his testimony as part of your
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
24/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 23
1 KIERAN WALLACE
2 10:24:0 question. Just ask the question
310:24:0
without the preface. That's not
4 10:24:1 what he said. The record will
5 10:24:12 speak for itself.
6 10:24:13 Q. When were you appointed? I
7 10:24:1mean when were you told by the Department
8 10:24:1of Finance that you would be assuming the
9 10:24:1role of special liquidator on the 6th of
10 10:24:2February?
11 10:24:2 A. The only day that I got
12 10:24:3confirmation that I would actually be one
13 10:24:32of the special liquidators to IBRC was in
14 10:24:35the afternoon of the 6th of February.
15 10:24:4 Q. You have read the statement of
16 10:24:4affairs?
17 10:24:53 A. Correct.
18 10:24:5 Q. The statement of affairs, the
19 10:24:5directors of the bank contend that the
20 10:25:0bank was solvent and would have stayed
21 10:25:0solvent absent the rescission of the
22 10:25:15promissory notes. Do you agree with that
23 10:25:1conclusion?
24 10:25:25 A. No.
25 10:25:2 Q. Can you expound as to why you
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
25/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 24
1 KIERAN WALLACE
2 10:25:2do not agree?
310:25:35
A. Because the value of the
4 10:25:3bank's assets is less than its
5 10:25:4liabilities.
6 10:25:4 Q. So to clarify, it is your
7 10:25:4opinion that on the 5th of February, the
8 10:25:5value of the assets including the
9 10:25:53promissory notes due but not yet paid to
10 10:25:5the bank were less than its liabilities?
11 10:26:03 A. Yes.
12 10:26:0 Q. So you believe, just to
13 10:26:0clarify, that on the 5th of February,
14 10:26:1prior to the passage of the IBRC
15 10:26:13liquidation, the bank was trading while
16 10:26:15insolvent?
17 10:26:1 A. No.
18 10:26:1 Q. Can you explain why?
19 10:26:1 A. The reason being that on a
20 10:26:2cash test, the bank had cash facilities
21 10:26:3being provided to it on a rolling basis
22 10:26:3by the Central Bank.
23 10:26:3 Q. Secured against the promissory
24 10:26:3notes?
25 10:26:3 A. Correct.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
26/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 25
1 KIERAN WALLACE
2 10:26:3 Q. Had all the promissory notes
310:26:43
been drawn down in the form of, in the
4 10:26:4form of loans from the Central Bank?
5 10:26:4 A. I don't recall.
6 10:26:5 Q. I'm a bit baffled that you
7 10:26:5don't recall as liquidator.
8 10:27:0 MR. WAXMAN: Counsel, don't
9 10:27:02 argue with the witness. Just ask
10 10:27:03 questions. Whether you are baffled
11 10:27:0 or not is irrelevant.
12 10:27:15 Q. Where in the IBRC Act is the
13 10:27:1minister given the authority to rescind
14 10:27:2the promissory notes?
15 10:27:2 MR. WAXMAN: Lacks foundation,
16 10:27:23 calls for a legal conclusion. You
17 10:27:25 may answer if you know.
18 10:27:2 A. I do not know.
19 10:27:2 Q. Okay. Do you know under what
20 10:27:2basis -- in your investigation of the
21 10:27:33validity of the withdrawal, under what
22 10:27:3basis did the Minister of Finance
23 10:27:3withdraw the promissory notes?
24 10:27:4 MR. WAXMAN: In answering that
25 10:27:4 question make sure to exclude any
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
27/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 26
1 KIERAN WALLACE
2 10:27:4 legal advice you may have received
310:27:4
on that point. If you can answer
4 10:27:4 the question without disclosing
5 10:27:4 legal advice, please do so.
6 10:27:5 A. I cannot without dealing with
7 10:27:5legal advice.
8 10:27:55 Q. So what was the process that
9 10:28:1took place on the 7th of February? Can
10 10:28:22you go through the process on the 7th of
11 10:28:2February that put the bank into
12 10:28:25liquidation?
13 10:28:2 MR. WAXMAN: Vague. You can
14 10:28:2 answer.
15 10:28:2 A. There was an act passed by
16 10:28:3Parliament which allowed for the
17 10:28:4appointment of special liquidators to
18 10:28:4IBRC and at around 7:40 a.m. on that
19 10:28:5morning, give or take, myself and Eamonn
20 10:28:5Richardson were appointed joint special
21 10:28:5liquidators to IBRC and at that moment we
22 10:29:0took control of the operations of the
23 10:29:0bank and we commenced the winding up of
24 10:29:12the bank and its subsidiaries.
25 10:29:1 Q. And when were the promissory
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
28/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 27
1 KIERAN WALLACE
2 10:29:1notes rescinded? Was it after you were
310:29:1
appointed or before?
4 10:29:22 A. After our appointment.
5 10:29:2 Q. Did you attempt to prevent the
6 10:29:32promissory notes being withdrawn?
7 10:29:35 A. No.
8 10:29:3 Q. Why?
9 10:29:4 A. Back to legal advice.
10 10:29:43 Q. Okay. Wouldn't a liquidator,
11 10:29:52a competent liquidator in a normal
12 10:29:5liquidation attempt to prevent a debt
13 10:29:5owed to the company in insolvency being
14 10:30:03withdrawn by the debtor?
15 10:30:0 MR. WAXMAN: Incomplete
16 10:30:0 hypothetical. You can answer.
17 10:30:23 A. The role of any liquidator,
18 10:30:25any competent liquidator is to ensure
19 10:30:2that best value is achieved for each and
20 10:30:3every obligation that is due and owing to
21 10:30:3the bank.
22 10:30:3 Q. And why did you choose in this
23 10:30:4case not to try to retain the 35 billion
24 10:30:4owed to the bank by the government?
25 10:30:5 MR. WAXMAN: Again, if that
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
29/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 28
1 KIERAN WALLACE
2 10:30:5 was based on legal advice, you can
310:30:52
state that, but do not go into the
4 10:30:5 substance of the advice itself.
5 10:30:5 A. It was based on legal advice.
6 10:30:5 Q. Were you ever directed by
7 10:31:03anyone in the Department of Finance not
8 10:31:05to question the withdrawal of the
9 10:31:0promissory notes?
10 10:31:1 A. No.
11 10:31:25 Q. Let's go back on to the events
12 10:31:35of the 7th, a very busy day. The
13 10:31:42promissory notes were withdrawn. When
14 10:31:45did the Central Bank present you with a
15 10:31:5demand for repayment of the 30 billion --
16 10:31:55no, the 24 billion that had been loaned
17 10:31:5to the bank by the Central Bank?
18 10:32:05 A. My recollection is that it was
19 10:32:0on the afternoon of the 7th of February.
20 10:32:1 Q. So the promissory notes were
21 10:32:12withdrawn when, in the morning?
22 10:32:15 A. I don't recall.
23 10:32:1 Q. Do you remember? Were the
24 10:32:1promissory notes withdrawn before or
25 10:32:2after the demand from the Central Bank?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
30/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 29
1 KIERAN WALLACE
2 10:32:22 A. I actually don't recall.
310:32:2
Q. And I understand -- can you
4 10:32:33tell me the security interest taken by
5 10:32:35the Central Bank, the charge held by the
6 10:32:3Central Bank over the assets of IBRC,
7 10:32:4what happened to that?
8 10:32:4 MR. WAXMAN: Vague.
9 10:32:5 A. That charge was transferred to
10 10:32:5NAMA.
11 10:32:5 Q. Are you privy to the reason
12 10:33:0that charge was transferred?
13 10:33:0 A. Yes.
14 10:33:0 Q. Can you explain why that
15 10:33:0charge was transferred?
16 10:33:13 A. Because NAMA had agreed to
17 10:33:1provide funding to the special
18 10:33:1liquidators in order to facilitate the
19 10:33:2winding up of the bank.
20 10:33:2 Q. So just to go back to those
21 10:33:3events, the obligation of the government
22 10:33:33to the bank was withdrawn; the Central
23 10:33:3Bank demanded repayment of the loans that
24 10:33:3were made, secured by that debt; the
25 10:33:4charge that was entered into in October
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
31/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 30
1 KIERAN WALLACE
2 10:33:5was transferred to NAMA; was that on the
310:33:55
7th?
4 10:33:55 A. I don't recall.
5 10:33:5 Q. Are you familiar with the
6 10:34:02provisions of section 10 of the IBRC Act?
7 10:34:0 A. No.
8 10:34:0 Q. We will get back to that one,
9 10:34:13dig out a copy and review it.
10 10:34:1 Is it possible that the, in
11 10:34:1your mind that the promissory note was
12 10:34:22transferred to NAMA so that the validity
13 10:34:2of the note could not be transferred
14 10:34:2pursuant to the IBRC Act?
15 10:34:3 MR. WAXMAN: Calls for
16 10:34:33 speculation.
17 10:34:33 A. I don't actually understand
18 10:34:35the question.
19 10:34:3 Q. Okay. Well if you're not --
20 10:34:3we will get to the IBRC Act in a minute.
21 10:34:4We are going to go through the nature of
22 10:34:42it. Okay.
23 10:34:4 Who oversees the Central Bank?
24 10:34:5 A. My view is they're an
25 10:35:03independent regulator.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
32/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 31
1 KIERAN WALLACE
2 10:35:0 Q. Well they are appointed by
310:35:0
someone. Who appoints them?
4 10:35:13 A. I don't know.
5 10:35:1 Q. Who oversees NAMA?
6 10:35:2 A. Department of Finance.
7 10:35:2 Q. And who do you report to?
8 10:35:3 A. I have a dual reporting role.
9 10:35:3I have a reporting obligation to the
10 10:35:4Minister of Finance and I also have an
11 10:35:43obligation to report to creditors at
12 10:35:45large.
13 10:35:45 Q. Now when we started you said
14 10:35:5that in a normal liquidation of an
15 10:35:53insolvent company the shareholders would
16 10:35:5propose a liquidator and then there would
17 10:36:0be a meeting of creditors who could veto
18 10:36:0that liquidator. Was there a meeting of
19 10:36:1creditors in the IBRC liquidation?
20 10:36:1 A. Let me go back to what I said.
21 10:36:1I said there were two ways in which an
22 10:36:2insolvent company can be put into
23 10:36:22liquidation in Ireland. One is by way of
24 10:36:2shareholder resolution and the other is
25 10:36:2by way of court appointment. And the
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
33/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 32
1 KIERAN WALLACE
2 10:36:32shareholder resolution is the example
310:36:35
we're talking about. And in that example
4 10:36:3or in that method, there is a meeting of
5 10:36:4creditors, not in a court liquidation.
6 10:36:4 Q. I understand. But again are
7 10:36:5you aware of a shareholder resolution in
8 10:36:55this case by the sole shareholder, the
9 10:36:5sole member, that is the Irish
10 10:37:0government, the Department of Finance, to
11 10:37:02put IBRC into liquidation?
12 10:37:0 A. No.
13 10:37:05 Q. The statement of affairs says
14 10:37:1there was such a shareholder's resolution
15 10:37:1to put IBRC into liquidation?
16 10:37:1 MR. WAXMAN: Is that a
17 10:37:2 question?
18 10:37:2 Q. Yes. I'm saying you're not
19 10:37:2aware that on the 6th the government of
20 10:37:2Ireland passed a shareholder's resolution
21 10:37:2to put the bank you're liquidator of in
22 10:37:3liquidation, you're not aware of that
23 10:37:3resolution?
24 10:37:32 A. My view is that the Irish --
25 10:37:3that the actual politicians in Ireland
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
34/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 33
1 KIERAN WALLACE
2 10:37:43who are elected into office decided to
310:37:45
pass an act which in itself put IBRC into
4 10:37:4liquidation.
5 10:37:4 Q. So you are not aware there
6 10:37:5exists a resolution that put IBRC into
7 10:37:5liquidation?
8 10:37:5 MR. WAXMAN: Asked and
9 10:37:55 answered, also vague.
10 10:37:5 Q. No, I'd like an answer to
11 10:37:5that. I've not gotten an answer to that.
12 10:38:0Yes or no, are you aware of a resolution
13 10:38:03that put, passed on the -- presented to
14 10:38:0the directors of IBRC on the 6th of
15 10:38:1February that put IBRC into liquidation?
16 10:38:12 MR. WAXMAN: Well, he doesn't
17 10:38:13 have to answer you yes or no,
18 10:38:15 counsel, he has to give you a full
19 10:38:1 and complete answer. So you can go
20 10:38:1 ahead and answer the question.
21 10:38:2 Q. To the question.
22 10:38:2 A. I'm personally not aware, no.
23 10:38:22 Q. So what kind of liquidation
24 10:38:25would you characterize the IBRC
25 10:38:2liquidation? There are two types, one is
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
35/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 34
1 KIERAN WALLACE
2 10:38:2a court liquidation, as you said, and the
310:38:3
other is a shareholders liquidation.
4 10:38:35Which would you characterize the IBRC
5 10:38:3liquidation?
6 10:38:3 MR. WAXMAN: Vague.
7 10:38:3 Q. Well there are only two types.
8 10:38:4Pick A or B?
9 10:38:42 A. I'm not going to pick either.
10 10:38:45I think it's a combination of both. I
11 10:38:4think that there's the normal obligations
12 10:38:53the liquidator has in respect of doing a
13 10:38:5liquidation of an insolvent company, and
14 10:39:0secondly, there's the full ability of any
15 10:39:03creditor to reach out to the court --
16 10:39:0 Q. That's not -- excuse me.
17 10:39:0 MR. WAXMAN: Counsel, don't
18 10:39:0 interrupt the witness. Let him
19 10:39:1 finish.
20 10:39:1 MR. O'NEILL: He's not
21 10:39:12 answering my question.
22 10:39:13 MR. WAXMAN: That doesn't
23 10:39:1 matter. You can move to strike it
24 10:39:15 if you don't find it responsive.
25 10:39:1 What you cannot do is interrupt the
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
36/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 35
1 KIERAN WALLACE
2 10:39:1 witness. May I please have the
310:39:1
answer that was given read back and
4 10:39:2 then ask you to continue your
5 10:39:22 answer.
6 10:39:3 (The requested portion of the
7 10:39:3 record was read.)
8 10:39:3 A. -- to ask the court to rule on
9 10:39:4any matter of which that creditor is not
10 10:39:43happy about in the context of the
11 10:39:4carrying out of the liquidation.
12 10:39:5 Q. In a court liquidation, court
13 10:39:5ordered liquidation, how does that come
14 10:40:0about?
15 10:40:02 MR. WAXMAN: Vague. You can
16 10:40:03 answer.
17 10:40:0 A. There is a petition to the
18 10:40:0court by creditor or by shareholder or by
19 10:40:1directors of the company to seek the
20 10:40:1authorization of the court to place that
21 10:40:2company into liquidation.
22 10:40:22 Q. Was there such a petition in
23 10:40:2this case?
24 10:40:25 A. No.
25 10:40:2 Q. So this was not a court
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
37/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 36
1 KIERAN WALLACE
2 10:40:2liquidation?
310:40:2
A. No.
4 10:40:3 Q. So it is not a court
5 10:40:3liquidation. So this was a shareholder's
6 10:40:3liquidation? No?
7 10:40:3 A. I didn't say that.
8 10:40:4 Q. Okay. Was this a
9 10:40:42shareholder's liquidation?
10 10:40:43 A. My personal view, no.
11 10:40:4 Q. So this was a sui generis
12 10:40:4liquidation?
13 10:40:4 A. Sorry, what?
14 10:40:5 Q. One of a kind, all by itself?
15 10:40:5 A. It's a liquidation which is
16 10:40:5based on fundamental principles of all
17 10:41:0liquidations, but has an act which is a
18 10:41:0new act for the purpose of this
19 10:41:0liquidation underpinning the liquidation
20 10:41:0itself.
21 10:41:12 Q. Does the act allow for meeting
22 10:41:1of creditors to vet the liquidator?
23 10:41:1 MR. WAXMAN: Calls for a legal
24 10:41:2 conclusion. You can answer.
25 10:41:23 A. My understanding is that the
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
38/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 37
1 KIERAN WALLACE
2 10:41:25normal provisions of reporting to
310:41:3
creditors after two years in the
4 10:41:3liquidation, which is provided for under
5 10:41:3the Companies Act, applies. So after the
6 10:41:42passage of time, the appropriate time
7 10:41:4which is under the Companies Acts, the
8 10:41:4liquidator will call meetings of members
9 10:41:4of creditors.
10 10:41:5 Q. But in a normal liquidation,
11 10:41:5the court orders the meeting of creditors
12 10:42:03to be called?
13 10:42:0 A. Incorrect.
14 10:42:05 Q. Okay. Who orders the meeting
15 10:42:0of creditors to be called in a
16 10:42:0shareholder liquidation or in an
17 10:42:1insolvent company? Under what basis is
18 10:42:1the meeting of creditors held?
19 10:42:15 MR. WAXMAN: I can't
20 10:42:1 understand your question, now,
21 10:42:1 counsel. You've got three
22 10:42:1 different questions going on there.
23 10:42:2 Q. We established that in an
24 10:42:22insolvent company the shareholders may
25 10:42:25appoint a liquidator.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
39/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 38
1 KIERAN WALLACE
2 10:42:2 MR. WAXMAN: I think the
310:42:2
witness's testimony is what it is.
4 10:42:3 I'm just asking you to ask a
5 10:42:33 question that is a little bit more
6 10:42:3 less muddled than the last.
7 10:42:3 Q. Under what basis is the
8 10:42:4meeting, under that scenario under what
9 10:42:42basis is the meeting of creditors called?
10 10:42:4 A. The meeting of creditors in
11 10:42:4any liquidation is governed by the
12 10:42:52Companies Act.
13 10:42:53 Q. Yes, I understand.
14 10:42:5 A. And they set out the
15 10:42:55principles and the time frames under
16 10:42:5which those meetings are to be called,
17 10:42:5when they're to be called and how they're
18 10:43:0to be called. And those principles apply
19 10:43:0whether it is a court liquidation or in a
20 10:43:0creditor's voluntary liquidation, which
21 10:43:0is the other method of liquidation we
22 10:43:1spoke about.
23 10:43:12 Q. Do you know does the IBRC Act
24 10:43:1eliminate that provision of the Companies
25 10:43:2Act which calls for a meeting of
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
40/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 39
1 KIERAN WALLACE
2 10:43:2creditors to be called within 30 days of
310:43:2
the declaration of insolvency of a
4 10:43:2company?
5 10:43:2 MR. WAXMAN: Calls for a legal
6 10:43:2 conclusion. You can answer.
7 10:43:3 A. Can you point to me the 30 day
8 10:43:33rule you're talking to, about?
9 10:43:35 Q. Yes. Give me a moment. We
10 10:43:3will get back to that.
11 10:43:3 A. Okay.
12 10:43:3 Q. The meeting of creditors was
13 10:43:4not called in this case?
14 10:43:4 A. Correct.
15 10:43:4 Q. Has there been a meeting of
16 10:43:43creditors?
17 10:43:43 A. No.
18 10:43:4 Q. And can you say why there has
19 10:43:4not been a meeting of creditors?
20 10:43:5 A. Because I don't believe
21 10:43:53there's any obligation for a meeting of
22 10:43:5creditors at this point.
23 10:43:5 Q. And why is that?
24 10:44:0 A. Because we are following the
25 10:44:03normal provisions around calling
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
41/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 40
1 KIERAN WALLACE
2 10:44:0creditors meetings.
310:44:1
Q. Okay. You're confusing me
4 10:44:12now. You have said that in an insolvent
5 10:44:1company the shareholders may appoint a
6 10:44:1liquidator. Which has happened in this
7 10:44:2case, the sole shareholder appointed you
8 10:44:23as a liquidator. There is then a meeting
9 10:44:25of creditors who must approve that
10 10:44:2appointment. Was that meeting called to
11 10:44:3approve the appointment of you, yourself
12 10:44:32and Mr. Richardson as liquidators?
13 10:44:35 MR. WAXMAN: Asked and
14 10:44:35 answered. You can answer again.
15 10:44:3 A. What I said was there are two
16 10:44:3ways in which a company can be placed
17 10:44:4into liquidation. Only in the
18 10:44:4circumstances of the, as you call it, the
19 10:44:4shareholder's resolution is there any
20 10:44:5requirement for a meeting of creditors to
21 10:44:53approve the appointment of the
22 10:44:55liquidator. That does not arise in a
23 10:44:5court liquidation.
24 10:44:5 Q. Okay. So you're saying this
25 10:45:0is a court liquidation?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
42/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 41
1 KIERAN WALLACE
2 10:45:0 MR. WAXMAN: Asked and
310:45:0
answered. That's not what he's
4 10:45:02 testified to, counsel. What he
5 10:45:05 said is it has aspects of both and
6 10:45:0 that it's pursuant to special
7 10:45:0 legislation. So don't misstate the
8 10:45:1 witness's testimony. I understand
9 10:45:12 that you're unhappy with that
10 10:45:13 situation but the legislation is
11 10:45:15 what it is.
12 10:45:1 Q. Okay. Let's talk a little bit
13 10:45:23about the charge taken over the assets of
14 10:45:2IBRC by the Central Bank. You have
15 10:45:3provided a copy of this charge, it was
16 10:45:3taken out on the 18th of October. The
17 10:45:4company was liquidated or put into
18 10:45:42liquidation on the 7th of February.
19 10:45:4 Why would that charge not be
20 10:45:53perceived to be a fraudulent preference
21 10:45:5under section 286 of the Companies Act?
22 10:46:02 MR. WAXMAN: I'm not sure that
23 10:46:0 I understand what you mean by
24 10:46:0 perceived and calls for a legal
25 10:46:0 conclusion. But if you understand
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
43/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 42
1 KIERAN WALLACE
2 10:46:0 the question you can answer it.
310:46:1
A. What I would say is back to
4 10:46:12legal advice.
5 10:46:1 MR. WAXMAN: Then I would
6 10:46:15 instruct you not to reveal the
7 10:46:1 advice of your counsel in response
8 10:46:1 to the question. If your
9 10:46:22 understanding is based on legal
10 10:46:23 advice, you should plainly state
11 10:46:2 that so the record will reflect
12 10:46:2 that.
13 10:46:2 A. My understanding is based on
14 10:46:2legal advice.
15 10:46:2 Q. In your prior liquidations, if
16 10:46:3such a charge were taken within six
17 10:46:42months of the company being insolvent,
18 10:46:45would you have challenged that security
19 10:46:4in the court?
20 10:46:4 MR. WAXMAN: Incomplete
21 10:46:5 hypothetical. Are you asking him
22 10:46:5 if that's ever occurred?
23 10:46:53 MR. O'NEILL: Yes.
24 10:46:5 MR. WAXMAN: Or are you just
25 10:46:55 suggesting it did?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
44/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 43
1 KIERAN WALLACE
2 10:46:5 Q. Have you ever challenged a
310:46:5
security taken within six months of
4 10:46:5insolvency in the court?
5 10:47:0 A. Once.
6 10:47:0 Q. How many times has it happened
7 10:47:05in your liquidation that such a charge
8 10:47:0was taken within the six month period?
9 10:47:13 A. Quite a number of times.
10 10:47:15 Q. You've only challenged one?
11 10:47:1 A. Correct.
12 10:47:1 Q. Did anyone in the Department
13 10:47:2of Finance instruct you not to challenge
14 10:47:3the Central Bank's charge over the assets
15 10:47:33of IBRC?
16 10:47:35 MR. WAXMAN: Asked and
17 10:47:3 answered. You can answer again.
18 10:47:4 A. No.
19 10:47:4 Q. Why did the original timetable
20 10:48:0that was announced at the time of the
21 10:48:05liquidation to transfer, to sell and
22 10:48:12transfer the unsold assets to NAMA by
23 10:48:15August 2013 slip?
24 10:48:23 MR. WAXMAN: Lacks foundation.
25 10:48:25 If you can answer, go ahead.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
45/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 44
1 KIERAN WALLACE
2 10:48:2 A. The main reason was when we
310:48:2
actually got appointed as liquidators to
4 10:48:33the bank, we realized that the work that
5 10:48:3would need to be done to get those assets
6 10:48:42sold would take longer than what was
7 10:48:45envisaged prior to liquidation.
8 10:48:4 Q. What are the terms of your
9 10:48:52engagement as special liquidator? In
10 10:48:55other words, how are you hired and who
11 10:49:0may terminate your engagement?
12 10:49:0 A. I have a letter of engagement.
13 10:49:12And again, my understanding would be that
14 10:49:15the minister can terminate my role as
15 10:49:1liquidator or indeed the creditors if
16 10:49:2they are unhappy with the work that we're
17 10:49:2doing would have the ability to apply to
18 10:49:2court to have us removed.
19 10:49:32 Q. And under what conditions can
20 10:49:3the minister terminate your role as
21 10:49:3liquidator?
22 10:49:3 A. I don't recall.
23 10:49:4 Q. You don't know. Okay. In the
24 10:50:23one case that you have where you
25 10:50:25challenged a security interest taken
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
46/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 45
1 KIERAN WALLACE
2 10:50:3within six months of the liquidation,
310:50:35
what was the basis of that challenge?
4 10:50:3 MR. WAXMAN: Well let's get a
5 10:50:3 date on that first because if it's
6 10:50:4 prior to February then I'm not
7 10:50:4 going to allow you to inquire into
8 10:50:43 it. So can you put a time frame on
9 10:50:45 it?
10 10:50:4 A. First of all it's currently in
11 10:50:4the court system so I would be
12 10:50:5uncomfortable to discuss it.
13 10:50:5 Q. Can you explain as a
14 10:50:53liquidator then, your professional
15 10:50:55opinion, under what basis would you make
16 10:50:5a decision to challenge a fraudulent
17 10:51:0preference?
18 10:51:05 A. I would say there would need
19 10:51:0to be clear evidence of two issues:
20 10:51:1Intent and secondly, inappropriate
21 10:51:15consideration for the taking of the
22 10:51:1charge at that time.
23 10:51:1 Q. Those would be the two?
24 10:51:1 A. Yes.
25 10:51:2 Q. What limitations has the IBRC
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
47/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 46
1 KIERAN WALLACE
2 10:51:42Act placed upon you in your functions as
310:51:45
liquidator vis-a-vis your normal
4 10:51:5functions in a standard liquidation?
5 10:51:53 MR. WAXMAN: Calls for a
6 10:51:5 narrative.
7 10:52:02 Q. Are there any limitations on
8 10:52:03your powers as a liquidator imposed by
9 10:52:0the IBRC Act?
10 10:52:13 A. Yes.
11 10:52:1 Q. Can you explain what those
12 10:52:1are?
13 10:52:1 A. Those decisions which are
14 10:52:23given to us by way of ministerial
15 10:52:2instruction.
16 10:52:32 Q. So the minister can direct you
17 10:52:3by instruction to perform your tasks in a
18 10:52:3particular way?
19 10:52:4 MR. WAXMAN: Misstates his
20 10:52:42 testimony.
21 10:52:45 Q. What things may the minister
22 10:52:4instruct you on?
23 10:52:5 A. There could be a range of
24 10:52:5issues that the minister decides to
25 10:52:55instruct us on. All of those
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
48/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 47
1 KIERAN WALLACE
2 10:52:5instructions are public and in the public
310:53:0
domain.
4 10:53:0 Q. Are there any limitations in
5 10:53:0the things the minister may instruct you
6 10:53:0on?
7 10:53:0 MR. WAXMAN: Calls for a legal
8 10:53:0 conclusion. You can answer.
9 10:53:12 A. I do not believe so.
10 10:53:13 Q. You state in your original
11 10:53:3declaration and in your supplemental
12 10:53:3declaration and just now again that any
13 10:53:43unhappy creditor may go to court and
14 10:53:5challenge you, seek to replace you, you
15 10:54:0said.
16 10:54:0 I presume that's under Section
17 10:54:03280 of the Companies Act; is that
18 10:54:0correct?
19 10:54:0 A. I don't recall the section.
20 10:54:0 Q. But under the Companies Act
21 10:54:12any unsatisfied creditor can go to court?
22 10:54:1 A. Correct.
23 10:54:15 Q. And seek to replace you?
24 10:54:1 A. Correct.
25 10:54:1 Q. Have you terminated?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
49/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 48
1 KIERAN WALLACE
2 10:54:2 A. My understanding.
310:54:22
Q. It is your understanding that
4 10:54:25the court has the power to terminate your
5 10:54:2appointment?
6 10:54:2 A. My understanding is the court
7 10:54:3can rule on the termination of my
8 10:54:33appointment, yes.
9 10:54:3 Q. So the court may terminate
10 10:54:35your contract?
11 10:54:3 MR. WAXMAN: Asked and
12 10:54:3 answered.
13 10:54:3 Q. You believe?
14 10:54:3 A. I do.
15 10:54:3 Q. Can you tell me how many
16 10:54:5challenges have been brought under
17 10:54:5Section 280, or under the Companies Act
18 10:55:0to decisions that you have made? I'm not
19 10:55:0talking about permission to sue under
20 10:55:0Section 6, I'm talking about challenges
21 10:55:0to your decisions under Section 280 of
22 10:55:1the Companies Act?
23 10:55:13 A. I don't recall.
24 10:55:13 Q. Are there any?
25 10:55:15 A. I think there's one.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
50/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 49
1 KIERAN WALLACE
2 10:55:3 Q. Do you recall that one?
310:55:4
A. No, I don't.
4 10:55:4 Q. Is the case pending or is that
5 10:55:43resolved?
6 10:55:4 A. Case pending.
7 10:55:4 Q. Under Section 6 of the IBRC
8 10:55:5Act, as you're well aware, a party is
9 10:55:5required to obtain permission of the
10 10:55:5court to bring an action. Have you ever
11 10:56:0opposed any of those actions under
12 10:56:0Section 6?
13 10:56:1 A. One.
14 10:56:1 Q. And why?
15 10:56:1 A. Because it was going to be a
16 10:56:2case where it was our view that that case
17 10:56:2shouldn't continue on at that time.
18 10:56:3 Q. In a normal liquidation, have
19 10:56:33you ever opposed -- well is there a
20 10:56:3procedure for the liquidator to oppose a
21 10:56:4creditor bringing an action against the
22 10:56:43liquidator?
23 10:56:4 A. Yes.
24 10:56:4 Q. Have you ever opposed an
25 10:56:45action in a normal liquidation?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
51/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 50
1 KIERAN WALLACE
2 10:56:4 A. Yes.
310:56:4
Q. You have. What provisions are
4 10:56:5those that provide for that?
5 10:56:52 A. I don't recall the actual
6 10:56:55section numbers.
7 10:57:1 MR. WAXMAN: We've been going
8 10:57:1 about an hour, counsel, so at a
9 10:57:13 point convenient to you, IT doesn't
10 10:57:1 have to be right now, we'll take
11 10:57:1 our first break, but you pick the
12 10:57:1 time.
13 10:57:1 MR. O'NEILL: I'm happy to
14 10:57:1 take a break now.
15 10:57:2 (A recess was had.)
16 11:18:42 MR. O'NEILL: During the break
17 11:18:43 we have called the court. We
18 11:18:4 object to the time limitation.
19 11:18:4 MR. WAXMAN: It is my
20 11:18:4 understanding the time limitation
21 11:18:5 is based on the court's present
22 11:18:5 rulings, but of course you're free
23 11:18:53 to call the court.
24 11:18:5 MR. O'NEILL: We have a call
25 11:18:5 into the court.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
52/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 51
1 KIERAN WALLACE
2 11:18:5 Q. Now let me go back, if I may.
311:19:0
You stated that under the Companies Act,
4 11:19:0the provisions, the winding up
5 11:19:0provisions, that a dissatisfied creditor
6 11:19:1can go into court and have you replaced
7 11:19:1under this, in this liquidation, right
8 11:19:1now in the IBRC liquidation.
9 11:19:22 Can you find, and this is the
10 11:19:2act, it would appear to me that the
11 11:19:2portion of the act that provides for that
12 11:19:3has been stricken by the IBRC
13 11:19:3legislation. And can you confirm that
14 11:19:3that is the case or can you find where in
15 11:19:42this act that provision where a
16 11:19:4dissatisfied creditor can have you
17 11:19:4replaced is embodied?
18 11:19:52 MR. WAXMAN: All right. So
19 11:19:52 let me make sure I understand what
20 11:19:5 you're asking him to do. You want
21 11:19:55 this witness to sit here and review
22 11:19:5 every page of the act and also the
23 11:19:5 Companies Act and track the
24 11:20:0 passages to make sure that his
25 11:20:03 recollection of the provisions are
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
53/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 52
1 KIERAN WALLACE
2 11:20:05 correct, because that's what we
311:20:0
will have to do to be able to
4 11:20:0 answer that question.
5 11:20:1 MR. O'NEILL: I understand
6 11:20:1 that. But the man has done 200
7 11:20:13 liquidations under this
8 11:20:15 legislation.
9 11:20:1 MR. WAXMAN: But, counsel,
10 11:20:1 before he's going to answer a
11 11:20:1 question like that, he is going to
12 11:20:1 have to read the entire act. If
13 11:20:2 you want him to do it we'll do it.
14 11:20:23 It's your time. But I'm just
15 11:20:2 making clear that that's what we
16 11:20:2 will have to do to be able to
17 11:20:2 answer that question.
18 11:20:2 MR. O'NEILL: I understand.
19 11:20:2 We will get back to that in a
20 11:20:3 minute. I do want him to do that
21 11:20:32 but we will get back to that.
22 11:20:3 MR. WAXMAN: Okay.
23 11:20:35 Q. Let me go on. Now, other than
24 11:20:3your lawyer, have you discussed the issue
25 11:20:42of possibility of a fraudulent preference
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
54/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 53
1 KIERAN WALLACE
2 11:20:4with any other person, with Mr.
311:20:4
Richardson or any other person in KPMG
4 11:20:5other than your lawyer?
5 11:20:53 MR. WAXMAN: And you can
6 11:20:5 answer that question yes or no.
7 11:20:5 A. Yes.
8 11:20:5 Q. And what was the nature of
9 11:21:0that discussion?
10 11:21:0 MR. WAXMAN: All right. In
11 11:21:0 answering that question, if what
12 11:21:03 you're doing is communicating the
13 11:21:0 advice that you received from
14 11:21:0 counsel to other people at KPMG who
15 11:21:1 are working with you in your
16 11:21:1 capacity as special liquidator,
17 11:21:1 then I would instruct you to
18 11:21:1 exclude from your answer any
19 11:21:2 conversation of the legal advice
20 11:21:22 that was given by the lawyers.
21 11:21:23 If you had a conversation with
22 11:21:25 someone at KPMG on that topic that
23 11:21:2 did not involve the advice of
24 11:21:32 counsel, then please answer the
25 11:21:33 question.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
55/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 54
1 KIERAN WALLACE
2 11:21:35 MR. ZACK: Wait a minute. I'm
311:21:3
not sure that's a proper ruling. I
4 11:21:4 believe --
5 11:21:42 MR. WAXMAN: Well, wait a
6 11:21:43 second, who are you?
7 11:21:4 MR. O'NEILL: This is Leonard
8 11:21:45 Zack, he's my associate.
9 11:21:4 MR. ZACK: I'm Leonard Zack.
10 11:21:4 MR. WAXMAN: All right.
11 11:21:4 MR. ZACK: It's my
12 11:21:5 understanding that the law of
13 11:21:53 attorney-client privilege runs from
14 11:21:5 a lawyer to you or whoever it is.
15 11:22:0 But that does not preclude him from
16 11:22:03 saying to a stranger on the street
17 11:22:0 I've been told that such and such
18 11:22:0 is the law.
19 11:22:1 MR. WAXMAN: Okay, that was
20 11:22:12 not the question. So first of all,
21 11:22:13 we will have one person speaking at
22 11:22:15 a time. So one of you can take the
23 11:22:1 deposition and the other can't.
24 11:22:1 But the question as I understood it
25 11:22:2 was did you talk to anyone at KPMG.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
56/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 55
1 KIERAN WALLACE
2 11:22:2 Therefore the privilege --
311:22:25
MR. O'NEILL: No, I said did
4 11:22:2 you talk to anyone at KPMG or
5 11:22:2 otherwise regarding the fraudulent
6 11:22:3 preference.
7 11:22:32 MR. WAXMAN: Okay. He
8 11:22:33 answered with respect to KPMG.
9 11:22:3 Q. Did you talk to anyone at KPMG
10 11:22:3or otherwise with respect to the
11 11:22:3fraudulent preference?
12 11:22:3 MR. WAXMAN: Okay, but it's a
13 11:22:4 compound question so take it one at
14 11:22:4 a time because he said yes to KPMG.
15 11:22:4 Q. Did you talk to anyone else?
16 11:22:4 A. No.
17 11:22:4 Q. And whom did you talk to at
18 11:22:4KPMG?
19 11:22:52 A. I spoke with Mr. Richardson.
20 11:22:5 Q. And what was the nature of
21 11:23:0that conversation?
22 11:23:0 MR. WAXMAN: Again, exclude
23 11:23:03 from your answer any communication
24 11:23:0 to Mr. Richardson that involves the
25 11:23:0 advice you received from counsel or
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
57/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 56
1 KIERAN WALLACE
2 11:23:1 anything you and Mr. Richardson
311:23:1
might then ask counsel.
4 11:23:1 A. That is what I discussed with
5 11:23:1Mr. Richardson.
6 11:23:2 MR. WAXMAN: On that basis
7 11:23:2 I'll instruct you not to answer.
8 11:23:2 (Instruction not to answer.)
9 11:23:25 MR. O'NEILL: I don't think
10 11:23:2 that that's -- I do not believe
11 11:23:2 that's the appropriate standard.
12 11:23:2 It's not.
13 11:23:3 MR. WAXMAN: That would be
14 11:23:3 news to anyone practicing law. So
15 11:23:3 --
16 11:23:3 MR. O'NEILL: I think
17 11:23:35 discussions with a third party are
18 11:23:3 not subject to the privilege.
19 11:23:3 MR. WAXMAN: He's not a third
20 11:23:4 party. That's the problem with
21 11:23:42 what you're suggesting. He is not
22 11:23:4 a third party. He is working with
23 11:23:4 him in his capacity as special
24 11:23:4 liquidator. Therefore, the
25 11:23:5 privilege applies. You can
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
58/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 57
1 KIERAN WALLACE
2 11:23:5 challenge that if you want.
311:23:53
MR. O'NEILL: I challenge it.
4 11:23:5 I don't believe the challenge
5 11:23:55 applies.
6 11:23:55 MR. WAXMAN: You'll be
7 11:23:5 disappointed in your challenge.
8 11:23:5 MR. O'NEILL: Maybe, but I
9 11:23:5 challenge it.
10 11:23:5 MR. ZACK: We can do it with
11 11:24:0 the same phone call.
12 11:24:0 Q. How often do you communicate
13 11:24:0with the Department of Finance?
14 11:24:1 A. We have a weekly meeting and
15 11:24:23there are other occasions where I would
16 11:24:2have telephone calls at different times
17 11:24:2during the week.
18 11:24:3 Q. How many telephone calls, how
19 11:24:33many discussions, ten times a day? Can
20 11:24:3you give a number?
21 11:24:3 MR. WAXMAN: Don't guess,
22 11:24:3 don't speculate. If you can give
23 11:24:4 an estimate.
24 11:24:4 Q. Well tell me.
25 11:24:42 MR. WAXMAN: He's not going to
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
59/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 58
1 KIERAN WALLACE
2 11:24:43 tell you if he's guessing or
311:24:4
speculating. If you can give a
4 11:24:4 reasonable estimate, please do so.
5 11:24:4 A. Last week, for example, one.
6 11:24:5 Q. And what is the topic of these
7 11:24:53telephone calls?
8 11:24:5 A. It can vary from last week I
9 11:25:0was arranging the time of our weekly
10 11:25:03meeting.
11 11:25:03 Q. And what is the purpose of
12 11:25:0this weekly meeting?
13 11:25:0 A. Purpose is to provide an
14 11:25:12update as to any material developments
15 11:25:1that may have occurred in the previous
16 11:25:1week.
17 11:25:2 Q. Have you ever, other than the
18 11:25:2directives that you, the three directives
19 11:25:2that you mentioned --
20 11:25:2 MR. WAXMAN: Do you mean
21 11:25:3 ministerial instructions?
22 11:25:33 MR. O'NEILL: Ministerial
23 11:25:33 instructions.
24 11:25:3 Q. -- been advised, requested or
25 11:25:3instructed in any way by anyone in the
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
60/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 59
1 KIERAN WALLACE
2 11:25:42Department of Finance in the carrying out
311:25:4
of your activities?
4 11:25:4 A. The Department of Finance are
5 11:25:4very clear and are clear in all
6 11:25:52communications that myself and Mr.
7 11:25:53Richardson act independently as
8 11:25:5liquidators. And on the only occasions
9 11:26:0where there is direct instructions
10 11:26:05through the ministerial instructions.
11 11:26:0 Q. Can you answer yes or no?
12 11:26:1Have you ever been instructed, advised or
13 11:26:1directed by anyone in the Department of
14 11:26:1Finance to act in a particular way, other
15 11:26:1than the ministerial instructions?
16 11:26:23 A. No.
17 11:26:2 Q. Who pays KPMG for the work?
18 11:26:4 A. IBRC in special liquidation.
19 11:26:4 Q. And who approves the invoices?
20 11:27:0 MR. WAXMAN: I'll object to
21 11:27:0 lacks foundation based on the
22 11:27:0 witness's puzzlement.
23 11:27:12 A. I'm not sure anyone
24 11:27:1necessarily approves them.
25 11:27:1 Q. You pay yourself?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
61/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 60
1 KIERAN WALLACE
2 11:27:1 A. They're paid out of the
311:27:2
company in liquidation, yes.
4 11:27:22 Q. So the invoices are --
5 11:27:2 A. They will eventually be
6 11:27:2approved.
7 11:27:2 Q. By?
8 11:27:3 A. By the creditors.
9 11:27:32 Q. Does the Department of Finance
10 11:27:33review the invoices or the payments?
11 11:27:3 A. They see them.
12 11:27:4 Q. Do they have the power to
13 11:27:42approve or disapprove them?
14 11:27:5 A. They probably have the power
15 11:27:5but they do not.
16 11:27:5 Q. Has the Department of Finance
17 11:28:0or anyone in the Department of Finance
18 11:28:03ever questioned a KPMG invoice?
19 11:28:0 A. No.
20 11:28:0 MR. WAXMAN: Lacks foundation.
21 11:28:0 You may answer.
22 11:28:0 A. No.
23 11:28:1 Q. Is it true that you advised
24 11:28:33the Minister of Finance that the terms of
25 11:28:35the request for proposals for the bids on
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
62/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 61
1 KIERAN WALLACE
2 11:28:4the IBRC loan book was confidential?
311:28:4
MR. WAXMAN: Vague.
4 11:28:4 A. Could you rephrase that
5 11:28:4question, please.
6 11:28:4 Q. Okay. Did you advise the
7 11:28:5Department of Finance that the terms of
8 11:28:5the request for proposals that was sent
9 11:29:02out to bidders on the KPMG -- sorry, the
10 11:29:0IBRC loan book should be kept
11 11:29:1confidential?
12 11:29:1 A. No.
13 11:29:15 Q. Were the terms of that request
14 11:29:2for proposals made public?
15 11:29:2 A. No.
16 11:29:2 Q. Who made the decision not to
17 11:29:2make it public?
18 11:29:2 A. Myself and Mr. Richardson.
19 11:29:2 Q. Why?
20 11:29:3 A. Because we want to keep the
21 11:29:3process and parameters around it
22 11:29:4confidential.
23 11:29:4 Q. Would the sale of assets in a
24 11:29:52standard liquidation be kept confidential
25 11:29:5in the same way?
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
63/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 62
1 KIERAN WALLACE
2 11:29:5 A. Yes.
311:30:0
Q. Are there any differences
4 11:30:0between the ministerial instructions on
5 11:30:15the 10th of May and the 20th of July as
6 11:30:1to the valuation method for IBRC's assets
7 11:30:23and the method you would have applied in
8 11:30:25a, quote, normal liquidation?
9 11:30:3 A. I think I need to see the, the
10 11:30:32documents.
11 11:30:32 Q. The ministerial instruction?
12 11:30:3 A. To refresh my mind.
13 11:30:3 Q. Okay. I'm happy to get one of
14 11:30:3those. I don't have that with me.
15 11:31:0 Now, the minister has stated
16 11:31:15that the liquidation process will not
17 11:31:22sell the assets in a fire sale. Do you
18 11:31:2agree with that statement, that the
19 11:31:2minister has said so in several public
20 11:31:2statements?
21 11:31:2 MR. WAXMAN: I'm sorry, is the
22 11:31:3 question is he aware that the
23 11:31:3 minister has made those statements?
24 11:31:33 MR. O'NEILL: Is he aware,
25 11:31:3 yes.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
64/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 63
1 KIERAN WALLACE
2 11:31:3 A. Yes.
311:31:3
Q. Are you aware what is going to
4 11:31:3happen to the assets that you have not
5 11:31:3managed to sell at the termination of the
6 11:31:4liquidation of IBRC?
7 11:31:43 A. Yes.
8 11:31:4 Q. And what is going to happen to
9 11:31:45those assets?
10 11:31:4 A. They will transfer to NAMA at
11 11:31:4the reserve price.
12 11:31:5 Q. And who will set that price?
13 11:31:5 A. Our independent valuers.
14 11:31:5 Q. So they will transfer it, the
15 11:31:5value price set out by the independent
16 11:32:0valuers?
17 11:32:02 A. Correct.
18 11:32:02 Q. In your knowledge, does the
19 11:32:0minister have the value to set the price
20 11:32:0that those assets will transfer to NAMA?
21 11:32:1 A. No.
22 11:32:1 Q. No, to your knowledge or no,
23 11:32:13he does not?
24 11:32:1 A. No to both.
25 11:32:1 Q. Is there any agreement between
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
65/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 64
1 KIERAN WALLACE
2 11:32:33IBRC, the special liquidators and NAMA
311:32:35
relating to the security that NAMA holds
4 11:32:3over the IBRC assets?
5 11:32:4 A. I believe there is, yes.
6 11:32:5 Q. Can you enlighten me on the
7 11:33:0terms of that agreement?
8 11:33:05 A. No, I can't.
9 11:33:0 Q. Do you know who negotiated
10 11:33:0that agreement?
11 11:33:1 A. I don't think necessarily
12 11:33:1there was any negotiation on the
13 11:33:1agreement. I think there was a, my
14 11:33:22recollection is that there is a
15 11:33:2correspondence in place with respect to
16 11:33:2the security that exists and any advances
17 11:33:3that NAMA would provide to us under the
18 11:33:3agreed facility that NAMA put in place to
19 11:33:3help us fund the liquidation should we
20 11:33:3require that funding.
21 11:33:4 Q. We presented an agreement, a
22 11:33:4draft of an agreement that was apparently
23 11:33:5never signed and was objected to by
24 11:33:5yourselves and stipulated that it had
25 11:33:5never been signed. The agreement that
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
66/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 65
1 KIERAN WALLACE
2 11:34:0does exist, can you tell me, is it
311:34:0
similar to that agreement, is it the same
4 11:34:1agreement, has it now been signed?
5 11:34:12 MR. WAXMAN: Do you want to
6 11:34:13 put the document in front of him?
7 11:34:2 Q. Have you had any discussions
8 11:34:4with the Department of Finance regarding
9 11:34:4the challenge to the promissory notes
10 11:34:5instituted by David Hall?
11 11:35:15 A. Yes.
12 11:35:15 Q. And what was the substance of
13 11:35:1those discussions?
14 11:35:1 A. I have asked how they thought
15 11:35:2the court case went.
16 11:35:2 Q. And that's it?
17 11:35:2 A. Yes. I should say for the
18 11:35:3record I do know Dave Hall.
19 11:35:4 Q. Okay. How many -- do you
20 11:35:43recall how many applications KPMG has
21 11:35:4made to the High Court so far relating to
22 11:35:5this liquidation?
23 11:35:55 A. No.
24 11:35:55 Q. Are those applications public?
25 11:36:05 A. They're on the record.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
67/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 66
1 KIERAN WALLACE
2 11:36:0 Q. On which record?
311:36:0
A. On the court record.
4 11:36:0 Q. The court record is not
5 11:36:12public.
6 11:36:1 A. I think any cases in which we
7 11:36:15would be taking an action would be
8 11:36:1public, if they're listed on the court
9 11:36:2diary which is available in the court's
10 11:36:2website in Ireland.
11 11:36:25 Q. I have a list of applications
12 11:36:2here and none of them are public.
13 11:36:3Application 2013-300S, are you familiar
14 11:36:3with that application made on the 14th of
15 11:36:3July, 2013?
16 11:36:3 A. No.
17 11:36:4 Q. Application 2013-474S on the
18 11:36:418th of October, 2013?
19 11:36:4 A. No.
20 11:36:4 Q. Application 2013-475S on the
21 11:36:5518th of October?
22 11:36:5 A. No.
23 11:36:5 Q. Application 2013-476S on the
24 11:37:0318th of October?
25 11:37:05 A. No.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
68/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 67
1 KIERAN WALLACE
2 11:37:05 Q. On the same day, 2013-477S and
311:37:1
2013-478S?
4 11:37:1 A. Not under the numbers you're
5 11:37:15describing, no.
6 11:37:1 Q. Are you aware of any
7 11:37:1applications to the High Court on the
8 11:37:218th of October by the special
9 11:37:2liquidators?
10 11:37:3 A. No.
11 11:37:3 Q. Who would make applications on
12 11:37:35your behalf?
13 11:37:3 A. My, my legal team.
14 11:37:3 Q. Without your knowledge?
15 11:37:4 A. No, I would have knowledge.
16 11:37:45There are also applications that would be
17 11:37:4made, in certain circumstances, by the
18 11:37:4legal team in IBRC with relation to IBRC
19 11:37:5matters, some of which I would be aware
20 11:37:5of, some of which I would not.
21 11:37:55 Q. What would be the applications
22 11:38:0you are aware of?
23 11:38:0 A. They would be applications in
24 11:38:03relation to ongoing pieces of litigation
25 11:38:0involving IBRC.
-
8/14/2019 Transcript Kieran Wallace IBRC Delaware Chapter 15, 04.11.2013
69/118
KIERAN WALLACE - 11/4/2013
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 68
1 KIERAN WALLACE
2 11:38:0 Q. To the High Court?
311:38:1