| 6.7°C Dublin

Bankrupt high-flyers risk losing pensions in UK courts

Close

Ivan Yates.

Ivan Yates.

Sean Quinn.

Sean Quinn.

John Fleming.

John Fleming.

Ray Grehan.

Ray Grehan.

/

Ivan Yates.

DEVELOPERS and former high-flyers who go to the UK to avail of its "soft" bankruptcy laws face the prospect of losing their multimillion-euro pensions, it has emerged.

The English courts have set a precedent by ruling that pension funds can now be taken from bankrupts.

The move could mean that the likes of high-profile broadcaster and retired politician Ivan Yates loses much of his €74,800 Dail pension.

England and Wales have become popular destinations for heavily-indebted developers in a bid to benefit from a more lenient bankruptcy.

Many of these people have changed their "centre of main business interest" to the UK in the hope of protecting multi-million euro pensions built up during the housing boom.

People who are declared bankrupt in England can emerge from the process in a year compared with up to 12 years here at the moment. And it had been thought that pensions were out of reach of creditors when people are declared bankrupt in England.

But a High Court case in London has thrown the situation into doubt after a judge ruled that bankrupts must hand over their pensions.

And the ruling means that even if an Irish person has already been through the bankruptcy process in the UK, they could still lose their pension.

Among those who have been declared bankrupt in the UK are Ray Grehan, one of Ireland's biggest property developers.

He has debts of €312m owed to the National Asset Management Agency,.

Former Minister for Agriculture Ivan Yates is understood to have moved to the UK and has spoken about seeking to become a bankrupt there. He is understood to owe €3.6m to AIB.

Club

The failure of his Celtic Bookmakers betting chain left him unable to repay the state-owned bank.

Others to join the 'Irish bankruptcy UK club' include John Fleming, who was discharged as a bankrupt by Southend County Court in Essex last November.

And Sean Quinn, once Ireland's richest man, tried unsuccessfully to have himself declared bankrupt within the UK system by going to the courts in Belfast.

Commenting on the ruling in the English court, pensions ombudsman Paul Kenny said: "What this means is that bankruptcy in the UK may not now be such a great idea."

Steve Thatcher of IrishBankruptcyUK.ie -- a service set up to advise Irish people on going bust in Britain -- said the ruling left pensions exposed for the first time.

He insisted the ruling flew in the face of logic and was set to be appealed.

Separately, NAMA is taking a test case to see if it can take control of some of the multi-million pension pot of Cork developer John Fleming who went bust last year with company debts of €1bn.

NAMA has appointed asset recovery specialists to see if it is entitled to some of the pension fund. Mr Fleming was discharged from bankruptcy last November after effectively proving he was entitled to avail of Britain's more lenient bankruptcy laws.

Irish Independent