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Thursday 22 March 2018

Bernard McNamara's clean start snatched away at last minute

The developer faces an additional six months as a bankrupt in the UK

BOOM TO BUST: Bernard McNamara owed his creditors some €2.7bn at the height of his indebtedness
BOOM TO BUST: Bernard McNamara owed his creditors some €2.7bn at the height of his indebtedness
Ronald Quinlan

Ronald Quinlan

FORMER property tycoon Bernard McNamara's efforts to secure a fresh start have suffered a dramatic setback after the High Court in London issued an order extending his one-year term of bankruptcy by a further six months.

Records filed with the UK's Insolvency Service show the court agreed to an application under Section 279 of the Insolvency Act on November 22 last to suspend the Clare-born developer's discharge from bankruptcy.

Mr McNamara had been due to emerge with a clean bill of financial health on November 2 last. However, the court's ruling means he will now remain a bankrupt until May 1, 2014.

While there is no public record identifying the objector to Mr McNamara's exit from the UK insolvency process, the Sunday Independent understands that the fallen tycoon's single biggest creditor, Nama, was the key driver behind the application brought by Mr McNamara's trustee on November 1 last.

Notwithstanding the fact that there were less than 24 hours left to run in Mr McNamara's one-year term as a bankrupt, the High Court made an "interim suspension of discharge order" on that occasion pending a full hearing of the matters raised.

Efforts to contact Mr McNamara for comment were unsuccessful this weekend.

A spokesman for Nama also declined to comment. However, a source familiar with the matter said that the State's toxic-loan agency was unhappy with the level of co-operation it had received from Mr McNamara since he opted to avail of the UK's more benign personal-insolvency regime.

Last August, the Sunday Independent reported how Nama was in the process of investigating Mr McNamara's financial affairs as part of a wider verification process involving the biggest borrowers on its books.

Commenting on that process at the time, a source close to Mr McNamara – who, at the peak of his indebtedness, owed his various creditors some €2.7bn arising from his and his companies' various investments – said that he had been going through an "awful time" dealing with inquiries from both Nama and his bankruptcy trustee.

While the precise details of Mr McNamara's case remain unclear, the decision of the High Court in London to prolong his period in bankruptcy under the specific provisions of Section 279 (3) of the Insolvency Act suggests it too was satisfied that he had failed to properly comply with his obligations under the UK's bankruptcy legislation.

According to the UK's Insolvency Service, applications for the suspension of discharge from bankruptcy may be granted in cases where, for example, the bankruptcy trustee can produce evidence that an individual failed to provide documentation following frequent requests to do so; sought to remove or conceal assets; or failed to provide current employment details.

The High Court's decision to suspend Mr McNamara's discharge from bankruptcy at such short notice is interesting in itself. In a note dealing with the matter of applications for such orders, the UK's Insolvency Service states on its website: "The court may decline to make an order where there is insufficient time available to deal properly with an application. The hearings are often opposed, and the court may not be able to accommodate any necessary adjournments.

"To prevent this occurring in the future, practitioners are asked to bring matters to the Official Receiver as soon as possible and, unless the circumstances are exceptional, not less than six months before the discharge period is due to expire. Last-minute requests will be rejected unless they are based on information which has only recently come to light and every effort has been made to secure the bankrupt's co-operation."

In the case of Mr McNamara, his trustee brought their initial application to the High Court November 1 last – less than 24 hours before he was due to be discharged from bankruptcy.

Sunday Independent

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