Anglo Irish not persuaded by new FitzPatrick plan
Published 03/07/2010 | 05:00
Anglo Irish Bank will next week oppose a private deal being proposed by advisers to former chairman Sean FitzPatrick aimed at dealing with his €110m of debts.
Mr FitzPatrick's advisers are proposing a private scheme of arrangement they believe will in the long term mean more money for Anglo, but last night it was clear Anglo's position had not changed from recent weeks when it was outlined in court.
With no agreement in sight ahead of a crucial meeting on Wednesday, Mr FitzPatrick is facing the real prospect of bankruptcy. While other banks, which are owed smaller amounts than Anglo, are prepared to vote in favour of the private deal (known as a scheme of arrangement), Anglo's agreement would be crucial for approval and is not forthcoming.
It is believed Mr FitzPatrick has a deficiency of assets over liabilities of about €50m, with his main asset being a share in the Ekeh Nigerian oil well. Anglo is confident they have perfect security over this asset, even though its precise value is hard to judge until it comes into continuous production.
If Anglo fails to agree to the arrangement at the Wednesday meeting a court hearing is due to take place the following Monday. With Anglo owed more than 40pc of the debt the nationalised bank can effectively block any deal despite the views of any other banks. Mr FitzPatrick is being advised on ways to deal with his financial problems by Bernard Somers, an accountant and former director of AIB and Independent News & Media.
Anglo denies the charge it is being vindictive or blocking the scheme of arrangement because of FitzPatrick's previous position. The bank is chasing up €155m of director's loans and has already taken provisions of €108m on this sum.
Apart from Anglo, the other creditors are First Active, AIB, Ulster Bank, EBS, the Revenue Commissioners, Friends First and Haven Bank.
If FitzPatrick enters bankruptcy, events come under the control of what is known as an official assignee, an official of the High Court, who sells off the bankrupt's property and distributes them to creditors.
A bankrupt person can lose their family home if the official assignee obtains permission to do so from the High Court.
If the bankrupt person owned a property with a spouse, the spouse keeps their share with the official assignee. When a sale occurs, the spouse receives the proceeds along with the assignee.
In personal bankruptcies, the bankrupt person can lose their salary and pension which can be appropriated for the benefit of their creditors.