Several Irish property developers have moved to the UK since the property crash in order to take advantage of the user friendly bankruptcy laws.
It looks like John Fleming is going to be the first of the property dev pioneers to come out with a result:
DEVELOPER JOHN Fleming, whose businesses were placed in liquidation last year with debts of €1 billion, was discharged from bankruptcy in Britain yesterday, giving him a financial clean sheet in that country.
The UK’s Insolvency Service, confirmed Mr Fleming was discharged from bankruptcy with effect from yesterday, November 10th. He was originally declared bankrupt in Southend County Court on the same date last year.
The British court’s discharge of his bankruptcy means creditors will not be able to pursue any assets or wealth he creates or develops in the UK from now on.The group owed its banks, Anglo Irish Bank, AIB, Dutch-owned ACC and Bank of Scotland, over €1 billion. Only ACC, which was owed €22 million, opposed the examinership.
Much of the debt was related to a site that the group was developing for residential commercial purposes in Sandyford in Dublin.
Mr Fleming’s bankruptcy and discharge could have implications for State assets agency, Nama, although it was not clear yesterday what these may be.
Last year, the agency took over €260 million that the Fleming group owed to AIB and Anglo Irish Bank (now the Irish Bank Reconstruction Corporation). Those debts were backed by personal guarantees given by Mr Fleming.This gets very interesting when it comes to working out just how much NAMA is going to lose by developers opting for the British bankruptcy courts.Under normal circumstances, if Nama cannot recover the full amount of a developer’s debt from the sale of the assets involved, it can pursue the individual for the balance, and demand that they use other resources or sell other assets, to repay whatever is due.
However, if Mr Fleming has used other assets to discharge his UK bankruptcy, that option will not be open to Nama.
The agency will not be able to pursue any wealth that he accumulates in Britain following yesterday’s discharge by the Southend court. Nama did not comment.
Ray Grehan was the latest to move to the UK a few months back