independent

Wednesday 16 April 2014

Bank stops O'Donnells' bid to be declared bankrupt in UK

Bank of Ireland has succeeded in blocking bust property investors Brian and Mary Patricia O'Donnell from having themselves declared bankrupt in the UK.

They now face being bankrupted under the harsher Irish system over debts of €70m owed to the bank. The couple attracted attention around the world after seeking bankruptcy in London last March.

Media attention focused on how Mr O'Donnell, a corporate lawyer and his psychiatrist wife Mary Patricia, had amassed and then lost a €1bn property empire spanning half the globe during the boom.

Before the property market collapsed they owned luxury homes in Dublin, Galway and London, as well as office blocks in London's Canary Wharf, Washington and the Swedish capital Stockholm.

Their lavish lifestyle was threatened when they applied to be declared bankrupt in London in March this year as a result of mounting property losses and unpaid debts.

Bank of Ireland objected to the move, and accused the couple of "bankruptcy tourism" and of trying to take advantage of more lenient UK bankruptcy rules.

Truthful

Yesterday the bank convinced Mr Justice Newey at the High Court in London that the O'Donnells' "centre of main interest" (COMI) was in Ireland, not London, which the couple had claimed.

"I am afraid that I cannot regard Mr O'Donnell as a frank, or even a wholly truthful, witness," Justice Newey said in his written judgment.

"Up to December 2011 at least, it seems to me that the impression given to third parties will have been that Mr O'Donnell was a Dublin-based businessman and solicitor. Dr O'Donnell would similarly, in my view, have appeared to be based in Ireland.

"The O'Donnells ran their business from Ireland, and that was where their COMI was," the judge said.

The O'Donnells now live in London but were not entitled to use the UK bankruptcy system when their application was made, the judge said. He dismissed their petitions.

The O'Donnells now face 12 years of bankruptcy under the Irish system instead of the year typical in the UK.

Their remaining wealth will go to pay off debts and during the bankruptcy period neither will be able to act as a company director, their ability to borrow is sharply reduced and their income can be taken to help meet debts.

However, the actual amount that banks can ultimately recover will not change their rights as a creditor as they are the same on either side of the Irish sea.

Bank of Ireland has been chasing the couple through the courts over a €70m debt for the past two years.

They tried to be declared bankrupt in London after they were ordered to repay the loans by the Commercial Court in Dublin last December.

Irish Independent

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