Anglo Irish Bank Files for Bankruptcy to Protect American Assets
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Anglo Irish Bank Files for Bankruptcy to Protect American Assets

August 28, 2013


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The Irish Bank Resolution Corp. of Dublin, which used to be known as Anglo Irish Bank, filed a bankruptcy petition in Delaware to protect more than a billion dollars in American assets, according to a report from Bloomberg Businessweek.

The bank, which suffered extreme losses after the recession took a bite out of the global economy in 2008, listed more than a billion dollars in debt in its petition, according to sources.

Sources say the bank was seized by Ireland in January, 2009, after a wave of misguided loans started to default when the country’s booming real estate market took a historic tumble after the start of the recession.

The decision to nationalize the bank, effectively bailing it out with a loan worth $46.3 billion, garnered a significant amount of criticism from Irish citizens who were struggling from the effects of the recession without the aid of bailouts themselves.

In February, the Irish government decided to place the bank into liquidation this February in order to restructure the massive bailout. The previous Irish administration had given the bank until 2020 to close its operations, sources report.

But despite the loan, the former Anglo Irish Bank still has outstanding loans worth roughly 16.6 billion euros, and it expects to lose nearly 11 billion euros in the future, according to recent public records.

This, however, is a significant drop from its highest debt load, 70 billion euros, which appeared in 2008.

And while the beginning of the bankruptcy process took place in Ireland, the bank decided to shield its assets from U.S. creditors by filing in Delaware.

Sources say Chapter 15 bankruptcy protects foreign companies from American lawsuits.

The 2008 collapse represented a total disaster for the Anglo Irish Bank, which was founded in 1964, and was once the third largest bank in Ireland, reports indicate.

The bank, which has also operated under names like Anglo Boston, Anglo Chicago Corp., and Anglo Washington, was spun into Irish Bank Resolution under a legislative act in 2011 after the bailout.

According to a government official, the decision to liquidate the bank was based on a “decline in property prices,” and “illiquidity in global wholesale funding markets,” which are restrained ways of saying the Irish economy has been a mess.

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