Financier McFadden insolvent and owes €100m, court is told
Published 20/05/2011 | 05:00
Niall McFadden: outside court in Dublin yesterday
FINANCIER Niall McFadden is insolvent with potential liabilities of almost €100m and is facing bankruptcy proceedings in London.
Yesterday the Commercial Court in Dublin heard that Anglo Irish Bank filed a bankruptcy petition in London last April, weeks after National Irish Bank (NIB) reached a deal with Mr McFadden over debts of more than €15m.
Last Wednesday Mr McFadden secured an order from a bankruptcy judge in London that temporarily protects him from his creditors while he tries to negotiate an Individual Voluntary Arrangement (IVA) with his creditors under UK bankruptcy laws.
Anglo, owed some €65m by the Boundary Capital founder, is his largest creditor and holds 73pc of his debts.
Mr McFadden needs the support of 75pc of his creditors for an IVA to be binding on them all and has valued his unencumbered assets at £500,000 (€567,384).
The IVA move came two days after the High Court here lifted an undertaking by Mr McFadden not to apply for bankruptcy either here or in the UK and less than a month before a bankruptcy petition brought by Anglo in the UK against Mr McFadden is due before the courts there.
The development also came on the eve of a hearing here where Mr McFadden was to be cross-examined about his assets by NIB as part of its effort to execute judgments of more than €15m against him.
The cross-examination was listed before the Commercial Court yesterday but at the outset, John Hennessy, counsel for NIB, told Mr Justice Peter Kelly his side had been told hours earlier Mr McFadden had secured an interim order at a hearing of the bankruptcy section of the High Court in London held at 4.30pm on Wednesday.
Following legal argument, Mr Justice Kelly ruled his discretion to proceed with the cross-examination was not fettered by the English order.
In cross-examination, Mr McFadden told Mr Hennessy he moved to London in September 2009, his wife and three children live in Blackrock, Co Dublin, and that he spends more than 50pc of his time in London.
He said is the sole employee of Boundary Advisory Services UK (BASUK), a limited liability company he set up in 2008 but has no written contract. He disagreed this was a vehicle to make money for him and said it was difficult to make money.
The court heard Mr McFadden and his wife are directors of BASUK. The hearing continues.