The bank had argued that it was legally required to pay bonuses to bankers for work done during 2008 – in the lead-up to the banking crisis.
However, Allied reconsidered its position following a letter from the Irish finance minister Brian Lenihan.
In November, it lost a case brought by a former banker, John Foy, who had sought a bonus of €160,000 based on his 2008 performance.
A contract is, after all, a contract.
If Allied had actually gone bankrupt, then of course the bankers could join the creditors queue along with everyone else. And lost wages might be privileged above other unsecured creditors or not: depends upon the specific system in Eire.
But given that Allied has not gone bankrupt …..for it hasn\’t, even though it clearly and obviously would without the State support….then those contracts still stand.
Which leads to an uncomfortable situation. The rule of law says that those contracts should be honoured. The baying mob insists that they should not be. And it\’s very difficult indeed not to be at least sympathetic to said mob.
But, in the end, in the long term, the damage done to an economy and a polity by breaking contracts at the say so of the mob (and the mob here can mean anything from the assembled politicians, the NGOs, through to the real mob) is, I would submit, much greater than the € 40 million that Allied looks like it\’s not going to pay out.