Page last updated at 17:32 GMT, Friday, 12 February 2010

Court ruling over Presbyterian Mutual Society savers

PMS

A judge has ruled that some savers in the Presbyterian Mutual Society (PMS) are not entitled to income from assets it has realised in the past two years.

The ruling said that those who saved £20,000 or less could not be classed as creditors.

Therefore, the judge said, they are not entitled to share in any of the £20m of income the society has generated since it went into administration in 2008.

The collapse of the society affected more than 10,000 savers.

The mutual scheme was not entitled to any government guarantee, putting at risk money people had saved in it.

Those with £20,000 or less in the society are classed as shareholders, while those with more are called loan capital holders.

The judgement on Friday hinged on whether those who were shareholders could be classed as creditors.

If they were, then they could share in the £20m of income the society has generated since it went into administration.

Sympathy

However, Mr Justice Deeney said that those shareholders who still had their money in the society when it went into administration in October 2008 - and who did not apply beforehand to withdraw it - could not be classed as creditors.

Therefore they are not entitled to any of the proceeds of the £20m when it is distributed by the administrator.

The judge said he sympathised with the situation shareholders had found themselves in.

Later on Friday, NI First Minister Peter Robinson said all options must be considered as soon as possible to help reach a resolution for the society's savers.

Mr Robinson was speaking after he and Deputy First Minister Martin McGuinness held talks at Downing Street with Prime Minister Gordon Brown.

He said ensuring savers were properly looked after could take time.

One saver who had money in the society, Stephen Riley, said on Friday it was "disappointing news".

He said: "Some people simply won't be able to afford this kind of news.

"It's quite discouraging, but not only that, in terms of an appeal, who do you appeal to?"

Help

The current Presbyterian Moderator, Reverend Stafford Carson, said PMS members would be disappointed that the principle of mutuality had not been upheld in the judgement.

He added: "The sad and disappointing thing is that many people who put their money into the PMS believed that it was a mutual society, that everybody stood together and fell together.

"They would have had no understanding of the idea that there was some difference between shareholders and loan holders and creditors and so on."

The moderator called on the prime minister to step in and help savers to get back "one hundred pence in the pound."

A spokesperson for the administrators, Arthur Boyd and Company, said they would study the judgement.

"We will advise members and creditors of the implications in due course," the spokesperson added.



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