Credit Institutions (Stabilisation) Act 2010

29.

Subordinated liabilities orders.

29.— (1) As soon as may be after completion in relation to a proposed subordinated liabilities order of the procedures required by section 28 , the Minister shall apply ex parte to the Court for an order (in this Act called a “subordinated liabilities order”) in the terms of the proposed subordinated liabilities order.

(2) The Court shall, when hearing an ex parte application under subsection (1) , if satisfied that the requirements of section 28 have been complied with and that the opinion of the Minister under section 28(1)(b) was reasonable and was not vitiated by any error of law, make a subordinated liabilities order in the terms of the proposed subordinated liabilities order (or those terms as varied after consideration of any submission referred to in section 28(5)(c) ).

F26 [ (2A) If in a proposed subordinated liabilities order the Minister has declared the intention of preserving or restoring the financial position of a credit institution, and the Court is satisfied that the Minister made the proposed subordinated liabilities order or part of it with that intention, the Court shall declare in the relevant subordinated liabilities order that the subordinated liabilities order or the relevant part of it is a reorganisation measure for the purposes of the CIWUD Directive. ]

(3) A report of the Bank relating to—

( a) the financial state of the relevant institution concerned at a particular time or times,

( b) the extent of the State’s support of the relevant institution,

( c) the amount of recovery that would have been made at a particular time or times by subordinated creditors of the relevant institution without State support,

( d) the amount of recovery that would have been made at a particular time or times by subordinated creditors of the relevant institution if it had been wound up or had been unable to continue as a going concern,

( e) any of the matters referred to in section 28 (2) ,

is admissible in evidence at the hearing of the application, whether or not prepared for the purposes of the application.

(4) The Court may make a subordinated liabilities order on terms varied or amended from those in the proposed subordinated liabilities order only if the Court is satisfied that—

( a) there has been non-compliance with any of the requirements of section 28 or that the opinion of the Minister under section 28 (1) (b) was unreasonable or vitiated by an error of law,

( b) it would be appropriate to do so, having regard to any report referred to in subsection (3) , and

( c) to do so is necessary to secure the achievement of the purpose specified in the proposed subordinated liabilities order.

(5) F27 [ ]

F28 [ (6) A subordinated liabilities order is effective from the date on which the requirements of section 29A(2)( a ) and ( b ) are met.

(7) If one of the consequences of a subordinated liabilities order is that it terminates or reduces the liability of a relevant institution to its subordinated creditors, that termination or reduction shall be taken, for all purposes, as having occurred immediately on the subordinated liabilities order s becoming effective under subsection (6). ]