‘People Would Be Mistaken If They Feel There’s Going To Be No Resistance’

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Pat Comer, President, Irish Creamery Milk Suppliers' Association (ICMSA).  - Photo: Kieran Clancy   © 19/1/12  **NO FEE ** With Compliments ICMSA

John Comer, president of the Irish Creamery Milk Suppliers Association (ICMSA)

This morning.

On Today with Sean O’Rourke 

The show looked at farmers’  distressed loans being sold to vulture funds. Contributors to the discussion included solicitor John Murphy, of John A Sinnott &Co Solicitors in Enniscorthy, Co Wexford, and president of the Irish Creamery Milk Suppliers’ Association (ICMSA) John Comer.

From their discussion:

John Murphy: “I saw somebody, as recently as yesterday, getting a letter from a mainstream bank saying his loan had been sold to a vulture fund. If you read the bottom of the page, it says ‘and will be managed by’ a different firm involved. So, you know, you’ve gone from a bank to a vulture fund but you can’t contact the bank, you can’t contact the vulture fund. There is a management organisation in charge of it who are based in a warehouse, where you just can’t really call in.

“And the difficulty, I think, about a lot of places, is trying to get a name, try to get a face that you can talk to. Try and do a deal. Let me give you a quick example.

“A vulture fund buys a mainstream debt, approximately six months ago. Within, there was information freely available that the debt was bought for 25% of its value. Within three months, the farmer concerned offered that vulture fund, its managing receiver, offered him 100% profit on the debt. Now, 100% profit in three months, by my reckoning is 400% per annum. And it was refused.”

Sean O’Rourke: “On what grounds?”

Murphy: Because the receiver took the view that the asset was worth more than the offer because his client had bought the loan, and the loan was in arrears, he was entitled to the whole asset. And I had a conversation, we had a polite conversation, and I asked how the receiver proposed to realise this farm which is in rural Ireland obviously. And, you know, who was going to buy it?”

“And really, I got absolutely nowhere. The attitude was, ‘ah, I heard all these arrangements about rural Ireland before, we’ll see where we go’. Now that’s the best part of a year ago. And nothing really has happened since.”

O’Rourke: “And what’s been happening on the farm, John?”

Murphy: “Oh the farmers are farming away.”

O’Rourke: “Are they repaying any money to anybody?”

Murphy: “They’re doing their best to make some repayments, yes. But, you have to wonder why was that offer refused? Were the, there must be investors behind every vulture fund. And you wonder, were they told that they were in line for a 100% profit within three months. Because anybody I know, in business, over the years, if they were getting 100% profit at three months, there’s only one thing they’d do, they’d take it and run, and get out.”

O’Rourke: “On the other hand, the vulture fund, or the person you were dealing with, may believe that there’s a better offer if they just sit tight for a little longer.”

Murphy: “Well you’d wonder about that because the offer was very well presented. There was an accountant, a very experienced accountant involved, it wasn’t just a kind of stab in the dark, you know, ‘we’ll get a quick deal from the vulture fund’. It wasn’t that kind of situation at all, Sean. This was carefully put together and a realistic, maximum, serviceable borrowing for this particular farmer was put forward and it was demonstrated, you know, on past figures, how he could. And he’d sourced another mainstream bank, by the way, to come up with the money. It wasn’t accepted. Now you have to wonder, did it have anything to do with the continuation of the case? Which obviously would bring the receiver in much better fees than if he cleaned it out fairly quickly.”

Later

John Comer: “There is a lot of stress and anxiety out there in terms of, by the fact that we’re dealing with an unknown entity. There has been a lot of representations made to our office in Limerick, looking for advice on how to proceed. Obviously, the individuals involved were in a distressed situation anyway. But this has, as they say, added insult to injury. People, you know who had two or three generations of farming dealing with a bank, now find themselves in a situation where they don’t know actually who they owe the money to. They have no point of contact and they fail to understand why a bank would sell off these loans at 30, 40, we’re hearing different percentages of the value when, perhaps there was other options that could have been explored.

“We feel that I don’t think there was enough done overall to get loans that were, probably under performing, restructured and given to business people an opportunity to restructure their loans and essentially pay back the debt.”

“…we have met with all the pillar banks, you know, with an overall policy that we do not want to see a repeat of ugly scenes of farms and family farms, I stress, being sold in this manner. Because we believe, in most cases, there can be a resolution found if there was more engagement and if there was more recognition of the reality of the situation. Because, I can assure you, if vulture funds start selling off family farms in rural Ireland over the course of the next year or two, there certainly will be, you know, ugly scenes manifesting themselves because it’s ingrained in all of Irish citizens, I think, the repulsion of people being thrown out of their business and their home and there actual farm because of  a history and I think people would be making a mistake if they felt there was going to be no resistance in that area.”

Listen back in full here

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50 thoughts on “‘People Would Be Mistaken If They Feel There’s Going To Be No Resistance’

  1. Anne

    There will be ugly scenes indeed.
    We can thank that sociopath Michael Noonan for all this.

    200 billion worth of loans sold off wasn’t it. And these funds just want the ‘asset’ repossessed.

    What they’re forgetting is this is a small country. People will organise and resist these repossessions.

    1. Kenny Plank

      Thank David McWilliams. Of course, the post-truth world would have you believe it was not his idea.

    1. Increasing Displacement

      Well if they’ve the balls to band together and stop this profiteering then fair play.
      Why people haven’t already organised themselves into some form of collective or co-op to fight these funds is beyond me. I would have thought the resistance to water charges thought them mass movements work.
      Not that that was news anyway, they’ve nearly always worked.

  2. Anne

    When did we get a programme about all this from RTE? Two weeks ago was it?

    How long has baldy Noonan been flying off to New York for fancy dinners with these Vultures? A few years now.

    Nama Wine Lake has been writing and tweeting about this wholesale sell off of the country by NAMA for the last few years.

    Why weren’t people told about this before the general election?

    FG and the other ar se of the same cheek FF need to go for good.

  3. postmanpat

    so. please someone correct me if I’m wrong, It goes like this: my friend Mr Scab owes me 100 quid but runs away every time I see him. I get offered 25 quid from Mr Vulture today and pass the loan onto him. I take the 25 quid. accept my loss of 75 quid and move on. Mr Scab, thinking he can wipe half his debt away then approaches Mr Vulture and offers him 50 quid. Mr Vulture tells Mr Scab its 100 same as before. Mr Scab is outraged that Mr Vulture wont accept a double in profit and moans to everyone about the injustice of it all . meanwhile I am still out 75 quid and have to hike up the interest on my other loans to cover the loss? I look like the bottomhole and everyone thinks of Mr Scab as the innocent victim.

    1. Andrew

      You have it in one. We are ALL paying for these people. We have a TINY repossession rate in this country yet and time even buy-to let landlords are taken to court everyone is up in arms.
      We have higher interest rates in Ireland because of this largesse to your feckless neighbour and the government if anything has been facilitating this.
      The whole thing is a clusterf*pp and the great unwashed haven’t a clue.
      Fine Gael and Fianna fail are both culpable and are indeed two cheeks of the same bottom but there is zero alternative in Ireland apart from the free money/welfare advocates

      1. Anne

        We’ve already paid..the banks were bailed out by the Irish taxpayer – i.e. all of us.

        These vultures are then getting 70, 80 and 90% write downs on the loans. They have no interest in working with people to restructure payments..they want the maximum return. i.e the ‘asset’ Peoples homes and farms and anything else loans are secured on. when people are turfed out on the street the taxpayer ends up picking up the tab again.

        These vultures are here to asset strip the country..they’re not beneficial in anyway to a functioning society.

          1. Rob_G

            She doesn’t believe in repaying loans, or allowing people to move back into their own house if they have rented it out at any stage.

        1. Mike Oxlong

          Your grasp of the basic principles is poor but don’t let that stop you. The debt is still owed.

          1. Taanbuaagam

            It isn’t. Banks have claimed a trading loss and associated tax deductible on it. Why do you want us to pay twice?

        2. Andrew

          There are landlords not repaying loans that aren’t being re-possessed. You sound like Gerry Beades Anne. Give him a shout.
          This type of attitude gives rise to the farce we had in Gorse Hill or indeed Matthias wood!
          Ah remember the battle of Matthias Wood? Those poor people! The occupy movement’s finest hour.

          1. Taanbuaagam

            Who said they disappear you moron? I said they get written down and a tax loss claimed on them

    2. scottser

      well, you took the 25 quid and you made the choice to cut your losses so what business is it of yours whether mr scab and mr vulture do business or not? and yes, you are the bottomhole firstly for lending to mr scab without due diligence and not pursuing him through the courts, as is your right. so go ahead and squeeze your other debtors for more money to compensate for your shoddy business model and your lack of professionalism.

      1. postmanpat

        yes, but if the court makes a judgement against Mr Scab, it doesn’t guarantee Mr Scab can repay me as he is hiding his liquid assets and getting behind the nu-land league. I might have been through all this before with Mr Tight, Mrs Poor-me and Miss Miseryguts. And I had shown due diligence with them too, and know (but cant prove) that they have the cash but wont part with it. I choose to get 25 % of my money back today rather than 30 percent of the money back in 5 years or never. The majority of my customers loans go repaid without missing a beat. Some of them have lost jobs in the meantime, sometimes more than once but kept payments up. But Mr Scab just stopped one day and ignored every attempt I made to make contact.

        1. Taanbuaagam

          But you’re a bad businessman in the first place. What part of “I can’t manage risk” are you struggling with?

        2. scottser

          i guess if the courts don’t work you could always try employing Grevious, Bodily and Harm Debt Services Ltd..they’re very persuasive, i’ve heard..

      2. Anne

        “well, you took the 25 quid and you made the choice to cut your losses so what business is it of yours whether mr scab and mr vulture do business or not?”

        Exactly +1 Scottser

        1. postmanpat

          it none of my business unless Mr Scab starts telling everyone that I’m some kind if monster after our business has concluded AND after I’ve taken a loss. Mr scab said he had no money to pay back any installments to me and kept running away , refusing to talk, then suddenly me comes up with 50 quid because he sees an opportunity to get out of the other 50 he owes. Mr Vulture see this as a little too convenient and demands the full amount. Mr Scab should have paid his due with the money he had instead of lying. Its people like Mr Scab that caused me to seek Mr Vulture in the first place. I’m making the damn loss here. or maybe I can tax deduct my 75 loss or some other nonsense that people are spouting here? somebody explain how that works?

  4. alx-mac

    Irish Creamery Milk Suppliers Association (ICMSA) should have given a more relevant anecdote for their cause, they have given an example of part of the problem rather than a real financially distressed farmer with nowhere to go – Can’t pay vs won’t pay or a chancer looking for a debt writedown in this case

  5. Fact Checker

    The dairy sector is actually quite a risky business.

    It’s a pity that equity finance is not more readily available.

    Debt finance is great when times are good, and it reduces your tax bill.

    When it goes bad the consequences are pretty awful.

    1. postmanpat

      not risky for the farmers it seems. Misspend the money. go on a wife finding/sex holiday to the Philippines. Make a balls of your business, don’t repay the loan and sit in your big farmhouse, let your minimum wage EU foreign work hands go and don’t pay them the last few weeks wages. The Brazilian workers that outstayed their visa two years ago? just keep their last few (below min wage) months wages too. What was a viable business on paper is now a cash moneypit hidden on the farm somewhere. you can blame everyone else but yourself. Want more cash? sure , sell your farm equipment to your other greedy farmer/relation for half what you (the bank) paid for. consequences to you, zero.

      1. Happy Molloy

        I haven’t seen many farms like that chief, big farmers employing staff are a minority in this country

        1. curmudegeon

          Pretty much every farmer employs farm-hands for the harvest season, they’re not all on the tax books of course but it’s common practice since forever.

          1. Happy Molloy

            suppose it depends where you’re from, not much harvest where I’m from unless you count the turf :-)

    2. Anne

      “The dairy sector is actually quite a risky business.”

      Guess what isn’t much of a risky business? You can get 70, 80 and even 90% of a discount thanks to our government-NAMA. You can ‘sweat’ the asset for a while to maximise your profits, pay little to no tax on your profits- thanks to our government. Then when you feel like you’ve made enough profit you can turf people out of their homes and farms, because you want to sell on the ‘asset’ that you’ve gotten a huge discount on.
      Not very risky at all.

  6. Kolmo

    Land War II, coming soon, to a field and/or housing estate near you, in full 3D, with 100% predictability.
    What is the endgame in the minds of those (Irish people) facilitating these cancerous vulture funds – is it a better, more rounded society, a more socially stable society? – no, it’s pure profit and fock everyone.

  7. Junkface

    Why don’t Anonymous hack the shizz out of vulture funds and destroy their structure & give away their money? They’re billionaires, they can afford it. We need to stop the billionaire class from the Detroying the world! Its heading that way.

    1. rotide

      Fantastic idea. I mean the last time the financial sector lost money it went so well for us didn’t it.

  8. Andy

    So along with getting EU subsidies farmers shouldn’t be troubled with repaying their debts.
    They all want broadband cause they’d be self sufficient if they could only sell their milk on t’internet (and not need it for netflix).
    And sure traffic laws aren’t for them when they clog up Dublin with their bloody tractors.
    And sure they’d never fudge their incomes to qualify for 3rd level grants?
    And sure paying cash in hand is unheard of down at the cattle mart.
    And their co-ops aren’t big cartels……………

    FF & FG will come running to the rescue.
    Why anyone would lend to a farm every again is beyond me.

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