Saturday 23 March 2019

Betting firm refused appeal to halt bankruptcy proceedings

Tim Healy

TWO former executives of a spread betting company have been refused permission to appeal a High Court refusal to halt bankruptcy proceedings against them.

Ms Justice Elizabeth Dunne said yesterday she was "gobsmacked" to be told Brian O'Neill and Fergus Rice, formerly of Marketspreads, now SFS Markets Ltd,  had not previously faced up to the possible outcome of their action to block the bankruptcy.

The judge  adjudicated them bankrupts and refused them leave to appeal her decision to the Supreme Court.

SFS Markets had petitioned for the bankruptcy of Mr O'Neill, The Copse, Beresford, Drumcondra, and of Mr Rice, Pembroke Road, Ballsbridge, both Dublin, over their failure to pay some €1.2m of judgments for €1.68m obtained on consent against them by Marketspreads in March 2012, just weeks before the firm was suspended by the Central Bank.

Mr O'Neill was CEO and Mr Rice an executive director of Marketspreads which offered investors a more flexible stock market investment option called spread betting.

They resigned in July 2011 after investigations indicated some €1.4m was owed to Marketspreads by Sports Spread Betting Ireland, of which Mr Rice was the majority shareholder and Mr O'Neill also had an interest.

Marketspreads was suspended by the Central Bank on April 6, 2012.

After SFS sought their bankruptcy, both men issued proceedings against SFS for orders including one marking the judgments obtained against them as having been satisfied.

It was claimed the men had been promised that if they sold their Marketspreads' shareholdings for €400,000, in order to have company's suspension lifted, both would not be pursued for the remaining €1.2m of the judgment.

Last week, Ms Justice Dunne refused to dismiss the bankruptcy summonses against them and adjourned the matter until yesterday when she was told by John Trainor SC, for the men, that both had been disappointed and "knocked back" by her judgment last week.

They are still involved in Sports Spread Betting and were concerned about the effect the judgment would have on that business and its employees, counsel said.

He asked that a stay be put on her judgment and that she also adjourn the adjudication of bankruptcy matter.

Mr Trainor said his side had just learned, before coming into court yesterday, of new information which might have made a difference to the judge's decision and would be relevant in any appeal.

His clients had "not really given proper consideration to the consequences of the losses before the judgment but it has now been brought home to them."

Ms Justice Dunne said, in quoting a phrase used recently by a parliamentarian, she was "gobsmacked" to learn the two men had not faced up to the possibilities of the outcome of their court proceedings.

Mark Sanfey SC, for SBS which had brought the bankruptcy petition, said that summed up his reaction and he was anxious that the bankruptcy should go ahead.

Ms Justice Dunne said it seemed to be suggested that further information had come to light which might give rise to an application to set aside a valid judgment, something that only occurred in exceptional matters.   It was, she said, at the very least surprising that such information was now only available given a very lengthy period in this case when affidavits were being exchanged between the sides.

She had adjourned the matter until yesterday in the expectation there might be engagement by Messrs O'Neill and Rice with the options available to them but that had not happened and there was little reason for a further adjournment.

As the proofs were in order, she was adjudicating the men as bankrupts and they should now engage with the court official in charge of their bankruptcy, the official assignee Chris Lehane, she said.

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