High Court proceedings brought by the former Anglo Irish Bank arising out of a severance payment made to former Anglo Irish Bank executive Tiarnan O'Mahoney have been settled.

The action related to a payment believed to be worth several million euro made by Anglo to Mr O'Mahoney, the bank's former Chief Operating Officer, following his departure from Anglo in early 2005.

It is claimed that as part of an agreement between the parties, Mr O'Mahoney received a significant seven figure sum as part of a termination payment from the bank.

In addition a seven figure sum was paid into the bank's pension scheme for his benefit.

In its action the bank sought the return of the money claiming that the severance agreement entered into with Mr O'Mahoney was invalid because it had not been approved by the bank's shareholders.

Mr O'Mahoney opposed the banks' action. In a counterclaim he sought an order for specific performance of the terms of the severance agreement.

He further sought damages if the bank was unable to comply with the terms of the agreement.

The action was due to be heard by Ms Justice Mary Laffoy, and had it run was expected to last for several days.

Yesterday morning the judge was told that following lengthy discussions between the parties, the sides had come to an agreement.

However no details of the settlement were revealed in open court.

Paul Sreenan SC for the bank said the matter could be adjourned generally with liberty to re-enter.