AIB won't recoup €3.7m as Ivan Yates ruled bankrupt in Wales
AIB will not be paid €3.7m it claims it is owed by former Fine Gael minister Ivan Yates after he successfully filed for bankruptcy in Wales.
The former bookmaker and radio presenter was officially declared bankrupt by a court in Swansea on August 24 -- but details only emerged yesterday.
The ruling came just days after an application by AIB to have him declared bankrupt here was dismissed by the High Court.
The bank claimed Mr Yates failed to repay a personal debt of €3.69m.
However, the court dismissed its application, saying there were questions over how much Mr Yates actually owes.
While the decision did not free the former minister from his debts or mean he was no longer under threat of bankruptcy, it did provide him with time to take advantage of more lenient bankruptcy laws in the UK, where he is now living.
Mr Yates had previously accused AIB of "vindictiveness" over its dogged efforts to have him declared bankrupt instead of coming to an agreement.
Last month it was revealed the bank had declined an offer to take his 160-acre family farm -- thought to be worth in the region of €2m -- to settle his debts.
Some banking experts believe AIB rejected the deal in the high-profile case in order to send out a clear message that it would not offer debt relief.
Mr Yates said yesterday: "AIB have harassed and intimidated me and my family since April."
His new financial status in Wales means he must now hand over all assets to an insolvency service, which will liquidate them.
The result will see him become, in his own words, an "economic zombie" for the next year, with access only to modest living expenses.
However, after 12 months he should receive a clean bill of financial health in what is a more lenient bankruptcy system to Ireland.
If he had been declared bankrupt here, Mr Yates would have faced 12 years of working to repay his debts to the bank -- even after handing over everything he owns.
Now, according to a legal expert, AIB is unlikely to recover any of its debt outside of loans to Mr Yates it had secured collateral against.
"There is probably very little they can do realistically," said Graham Kenny, a partner of Lyons Kenny commercial law firm and a leading authority on insolvency law.
"To a very large extent he is a sacrificial lamb because they (AIB) haven't actually bettered their position in any way."
Mr Kenny explained that had the bank agreed to strike a deal, Mr Yates could have remained in Ireland and worked to gradually reduce his liability.
"This way he is completely out of the game.
"He won't work and AIB have to pick up the pieces," he said.
"They (the insolvency service) take possession of your estate. The individual is not getting away with anything; you have a bank account but you have to give it over to an official accountant before you can spend anything."
Mr Yates is entitled to file for bankruptcy in Wales because he has established himself there.
He claims links to Swansea since 2004 -- the Celtic Bookmaker UK head office was based there -- and he has been living in the city since April.
This makes any bid to have his Welsh-based bankruptcy quashed here highly unlikely.
Mr Yates said he does not intend to come home.
"For the foreseeable future I cannot see any opportunities in Ireland,'' he said.
"I have switched off completely from Irish current affairs.
"I cannot return to media work because I was self- employed with my own company and now, in the wake of the bankruptcy decision, I am disqualified from having my own company. Like a lot of others, I face early retirement."
AIB would not comment last night.