‘Vultures’ to add on legal costs in sale of debt farms
FARMERS who have made settlements with so-called Vulture Funds – usually involving the sale of their farms – have been warned of a ‘sting in the tail’ in terms of a legal costs deduction.
Galway IFA Chairperson, Anne Mitchell said that it had come to the attention of the IFA that in cases where farmers would make cash settlements with the Vulture Funds, a legal costs deduction could be put in place from the final figure being paid to farmers.
Vulture Funds are normally international financial companies that buy-up problem debts or properties that are seriously arrears in payments – they buy the debt at a discounted price and then try to ‘move it on quickly’ at a profit.
However, according to Anne Mitchell the final figure that some farmers would get after their farms have been secured by the Vulture Funds, could involve a ‘significant deduction’ for legal costs.
“For example, if such a person received a settlement payment of €100,000, they could find themselves facing a legal costs deduction for possibly a five-figure sum.
“This is something that we are only at the early stages of looking at and of course we would be totally opposed to any such charge being imposed on farmers finding themselves in such an unfortunate situation,” said Anne Mitchell.
It is common practice for Irish banks to ‘off-load non-performing or under-performing loans’ to Vulture Funds who normally operate on the basis of a take-over of the property and a quick re-sale.
For more, read this week’s Connacht Tribune.