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Credit unions - transfer of engagement asset reviews and due diligence reviews

After the 2008 financial crash, the government gave a commitment during the February 2011 election to establish a Commission to look into the future of credit unions. The Final Report of the Commission on Credit Unions established the general framework within which the future sustainability of the credit union sector should be viewed. This was completed in 2012. The Commission Report formed the basis for legislative reform, to be enacted by December 2012, as part of the Troika programme. A core recommendation of the Commission was that the credit union sector should be restructured. This should be achieved on a voluntary, incentivised and time-bound basis.
Section 129 to 131 of the Credit Union Act 1997 (as amended) contain the necessary provisions for transfers of engagement to be executed. A credit union wishing to transfer its engagements to another credit union and a credit union agreeing to undertake to fulfil the engagements of another credit union can decide this course of action by Special Resolution of their members or, if the Central Bank of Ireland consents, by a resolution of the board of directors. The process for completing transfers of engagement is a multi-staged process. Beyond the initiation stage, and following appropriate engagement with the Central Bank of Ireland, both credit unions then proceed and complete asset reviews and financial and legal due diligences on both entities. Due diligence, in its generality, could be characterised as a process entered into by relevant parties to a restructuring process to establish all “relevant facts”. This in turn is designed to inform a decision of whether, or how best, to proceed with the restructuring transaction.
At Moore we have completed a significant number of asset reviews and due diligence reviews over the past decade. We can engage at speed and work to your deadlines. We pride ourselves on our ability to meet deadlines and issue detailed and comprehensive reports that focus on simplifying complexity.

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