'Soft' UK law leaves broke Fleming free to build within year
CORK property developer John Fleming has declared himself bankrupt in the UK but will get an automatic discharge early next November which will effectively leave him free to build and operate new businesses without having to worry about previous debts, according to court documents available on the internet.
The 59-year-old moved to Billericay in Essex earlier this year. Property developers with financial problems have been heading to countries such as Britain and the US to escape this country's onerous bankruptcy laws. In Britain, business people can resume most business functions just one year after declaring bankruptcy, compared with 12 years here.
In Britain, an automatic discharge means a bankrupt is freed from most debts incurred before the bankruptcy order and allows the bankrupt to borrow without mentioning it. He/she is also allowed to act as a director of a limited company and be involved in its management unless there is a separate disqualification order.
Fleming is popular in Clonakilty and the surrounding area where he was widely regarded as someone who treated workers, suppliers and customers fairly. He transferred his loans to the National Asset Management Agency in the second tranche, which suggests that he is in the top 30 borrowers, but not in the top ten.
A lifelong Fianna Fail supporter, Fleming built the Inchydoney Hotel & Spa (which has since been sold) and the Radisson Hotel on Fota Island, but the group ran into problems when he paid €165m for a 7.7-acre site in Sandyford in Dublin. The site was meant to house hundreds of flats and shops but is still a site today.
The first public signs of trouble at the Fleming Group came last July when it applied to the High Court to appoint an examiner to one of its companies, Tivway. During the the High Court hearings, the Fleming Group revealed that it had total debts of more than €1bn.
Allied Irish was the largest creditor, being owed almost €300m, closely followed by Anglo Irish Bank, which had lent the builder €268m.
In its examinership application, the Fleming Group proposed a 10-year workout plan drawn up by accountants PricewaterhouseCoopers. Under the PwC plan, Fleming Group's bank debts would be split into two separate tranches.
The High Court was sufficiently impressed with the plan to agree to the appointment of an examiner to Tivway but ACCBank objected and appealed the decision to the Supreme Court.
In its appeal, ACCBank argued that the restructuring plan contained no commitment of continuing financial support from the Fleming Group's bankers and that it amounted to nothing more than a "personalised NAMA".
The Supreme Court agreed with ACCBank and ruled that the group did not have a reasonable prospect of survival.