Within the last week there have been some positive developments related to recovering from the Presbyterian Mutual Society collapse.  The Society, which failed almost two years ago now, was associated with, but legally distinct from, the Presbyterian Church in Ireland.  Over the last two years the discussion has been both how to wind down the Society to get the best value from the assets is does have as well as the church having political discussions about a government rescue even this far after the collapse.

Some news this week…

The Presbyterian Mutual Society administrator has released an update regarding court decisions last week.  The most closely watched decision pertains to paying back depositors and the court granted permission for that to begin.  The situation is complicated by the fact that large depositors (more than £20,000) are regarded as creditors and small depositors as shareholders and in February the court did not grant permission for all members to be treated equally but upheld the law that creditors must be paid back first.  With that being the case and the court granting permission, the administrator has announced this week that at the end of the month he will make the first payment to creditors of 12p on the £.  The administrator is required to make public notice of this and the text of the notice that will appear in newspapers of record is available as a PDF document.

The administrator also reports that the court granted a one year renewable extension to the administration of the Society instead of the five year period he asked for.  In addition the court has given direction (reported but not described) concerning those depositors who were also borrowers from the society and it gave permission and guidance on forming a creditor’s committee on which the administrator plans to include a shareholder observer.  There is an Irish Times article and the  BBC has an article on this and William Crawley has more in his Will & Testament blog.  From the Irish Times piece it has the useful information that roughly £100 million is due shareholders and £204 million is due creditors.  The administrator has determined that probable loan recovery will be £102 million and the value of investment property is £97 million.

On the other front there is current action on the political rescue front as well. Yesterday First Minister Peter Robinson told the Northern Ireland Assembly that rescue of the Society by a commercial bank is still the preferred path forward and would do the most for the savers in the Society.  Today the situation is being debated in Parliament to remind the British Government of the seriousness of the situation.  The Londonderry Sentinel quotes one of their local MP’s, Gregory Campbell, as saying about the debate “This should ensure that the needs of savers with the PMS are heard in Parliament and the Government know exactly how important action is for these people.” And the Belfast News Letter quotes another MP, William McCrea, saying “The DUP will continue to work towards a resolution that will see money paid to all savers both large and small.”

In related political action Mr. Robinson in his comments also said that a government panel put together to consider the rescue alternatives should be reporting soon.  A recent UK Treasury committee investigation (Irish Times article) blamed a number of factors for the collapse including lack of tight Northern Ireland government oversight and regulation and the directors of the Society for the management.

It should be no surprise that with the slow pace of resolution, the inaction by the British Government when other financial institutions have been rescued, and the association of the Presbyterian Church of Ireland with the Society there are plenty of frustrated opinions being expressed.  Mr. McQuillan, a politician from East Londonderry, is quoted:

“The Westminster Government has failed the PMS savers.

“They protected various credit unions and sought compensation from Iceland for Britons who lost money abroad, but they have failed the savers within the PMS here in this loyal part of the United Kingdom.”

The Belfast News Letter article is titled “PMS payment ‘too little, too late’” and has corresponding quotes from Mr. Ian McGimpsey – “Whilst this payment may bring some financial comfort to many loan holders, for others with substantial debts to pay it will have
little or no impact,” – and from Mr. Jim Allister – “It is, however, also important to remember that the smallest investors who may have the greatest need – those who had under £20,000 invested in the society -have not even received this paltry sum (of 12p in the pound),” he said,adding that the delay in resolving the PMS “is appalling”.

A Belfast Telegraph article, “Reduced payout of cold comfort to PMS investors” focuses on the Rev. Dr. Stafford Carson, Moderator of the General Assembly of the Presbyterian Church in Ireland, and the stories he has heard from investors and how the church is working for a resolution.  And a piece in the Portadown Times by Dr. Carson details the involvement and investment by his own congregation in the Society.

So it looks like we hold on a little longer to see what government, probably combined with commercial, rescue might be put together.  And yes, this will certainly be a topic at the upcoming General Assembly.

UPDATE: Following the debate the Moderator, the Rev. Dr. Stafford Carson, posted his comments and general positive attitude about the hearing that the issues got in Parliament.  He also provides us the links to the transcript of the debate and the following answers to questions about the situation.