Company of O'Donnell children cannot purchase parents' claims over companies
A company of the four adult children of retired solicitor Brian O'Donnell and his wife Mary Patricia does not have the legal standing to seek to purchase certain claims relating to the bankrupt couple's estate, the High Court ruled.
Litigation Finance Ltd (LFL) is a company incorporated by the O'Donnell children - Blake, Bruce, Blaise and Alexandra - in England in 2012 with the sole purpose to purchase the claims relating to their parents' estates. Its directors are the two sons.
The O'Donnell couple's estate is now in the hands of bankruptcy official assignee, Chris Lehane, after they were declared bankrupt with debts of around €71m.
LFL had failed to set out particulars of the claims it sought to purchase which meant the court did not have sufficient information to assess them, Ms Justice Caroline Costello ruled. If such information is provided, or at least some of it, LFL may renew its application, she said.
Earlier, the judge said Blake O'Donnell, who is a solicitor and acted for LFL in seeking to purchase the claims, sought an order compelling the official assignee to assign to LFL "any and all claims" the parents possessed against two now insolvent companies called Hibernia (2005) Ltd and Gort Ltd.
LFL offered €3,500 for the assignment of the parents' claims against the two companies for what Mr (Blake) O'Donnell said was so that LFL could participate as a creditor in voting for the appointment of an insolvency practitioner in relation to the winding up of Hibernia (2005) and Gort.
The purpose of becoming creditors was, Mr O'Donnell said, that his parents believed Morgan Stanley Mortgage Servicing Ltd illegitimately levied an interest rate swap liability against Hibernia (2005) and Gort. Morgan Stanley subsequently appointed administrators over those two companies and sold a property at Westferry Circus in London to the Canary Wharf Group for the balance of an outstanding debt, Mr O'Donnell said.
The official assignee, Mr Lehane, sought more information from Mr O'Donnell about his proposal, including detailed documentary record about the claims that would be made. Mr O'Donnell disputed this and the legal challenge to the official assignee followed.
Ms Justice Costello said the court could not form an opinion that LFL has an interest within the meaning of the 1988 Bankruptcy Act (Section 61.7) to allow it buy the claims against the two insolvent companies.
At the very least, there should have been sufficient information for the court to assess whether LFL had such an interest, the nature of the claims and to assess whether the claims were bound to fail, frivolous or vexatious, she said. There should also have been some approximate assessment of the value of the claims, she said.