'Broke' ex-Anglo chief can't pay back €70m loan
But bank unlikely to seize FitzPatrick's family home
FORMER Anglo Irish chief Sean FitzPatrick has told the bank he is effectively broke and cannot repay the €70m he owes in unpaid loans.
As a result, the bank is now entitled to pursue all assets owned by Mr FitzPatrick, including his family home in Greystones, Co Wicklow.
The bank yesterday began legal action against Mr FitzPatrick as it sought to recover €70m owed by its former chief executive and chairman.
Finance Minister Brian Lenihan last night welcomed the move and warned the money owed by Mr FitzPatrick must be recouped.
He said the bank's management team would "pursue it to the ends of the earth".
While Anglo can place a claim on the FitzPatrick home, if it is owned by both spouses the bank cannot take possession.
Land registry records seen by the Irish Independent show that Ulster Bank already has a claim or "lien"' on the property.
This was registered last March and Anglo's claim may rank beneath that of Ulster.
The Irish Independent understands Mr FitzPatrick will not fight the legal action by the bank, but will reveal he has no more assets to convert into cash at this time.
Mr FitzPatrick was worth €90m at the peak of the Celtic Tiger, but the nationalisation of Anglo put a huge dent in his wealth.
The moves against Mr FitzPatrick are separate from a range of investigations about his decision not to disclose the loans to shareholders over an eight-year period.
The loans were moved to fellow lender Irish Nationwide before each year end.
Mr FitzPatrick, his legal advisers and bank representatives have been meeting over recent weeks to thrash out a deal on his loans. However, these negotiations have not proved successful.
A deadline for the payment of the money came this week, but Mr FitzPatrick could not do enough to stop the bank going down the legal route.
The bank, now under new management, entered a summary summons at the High Court yesterday.
It will now seek a hearing at the Commercial Court, which deals with cases involving more than €1m.
The loans held by Mr FitzPatrick are understood to be "fully recourse", which means Anglo can seek judgments against any assets it wants.
It may be more difficult to get judgments against assets outside Ireland.
Mr FitzPatrick owns a share in an oil well in Nigeria, for instance.
The Irish Independent has learned Mr FitzPatrick has engaged leading criminal law firm Michael Staines and Company to represent him as he faces as onslaught of civil and criminal investigations. The firm's principal, Michael Staines, will lead Mr FitzPatrick's legal team, which includes an array of specialists to deal with specific issues such as the Anglo debt action.
Mr Staines, a criminal law expert, was a member of the Council of the Law Society of Ireland and chairman of its criminal law committee.
It is understood Mr FitzPatrick is ready to meet the claims.
In recent months, Anglo has issued letters of demand to former executives and further summons are now expected to follow.
The Department of Finance last night said Mr Lenihan was "supportive of actions to reduce the bank's exposures''.
A statement said Anglo was determined to pursue debts outstanding.
"As a state-owned institution which has been supported by taxpayers' money, the minister would expect nothing less and welcomes the action of the bank."
Mr FitzPatrick and Anglo both declined to comment yesterday.
The negotiations with Mr FitzPatrick have been handled by an experienced international banker called Tom Hunersen, who was hired as a consultant by Anglo back in September.
Mr Hunersen is described as a tough negotiator and has been handling all the loans outstanding with former Anglo executives.
He spent 14 years at National Australia Bank (NAB), where he worked for a period with Mike Aynsley, the current Anglo chief executive.