Court rejects AIB move to declare Yates bankrupt
THE HIGH Court has dismissed an application by Allied Irish Banks to have former Fine Gael minister and broadcaster Ivan Yates declared bankrupt.
In a judgment yesterday, Miss Justice Elizabeth Dunne found that a bankruptcy summons issued by the bank in respect of Mr Yates, arising out of his alleged failure to satisfy a demand by AIB for payment of €3.69 million, could be struck out.
The judge said Mr Yates, who was entitled to challenge the validity of the summons, had raised “real and substantive issues,” in respect of the amount sought by AIB. These issues, which had “some prospect of success” have to be “litigated outside of the bankruptcy process”. For that reason, the judge said she was dismissing the bankruptcy summons.
The bankruptcy summons was issued last May in respect of a sum of €3.69 million claimed by AIB.
AIB claimed the money was due on foot of guarantee, dated April 2010, between it and Mr Yates where he agreed to pay on demand all the liabilities due and owing by Celtic Bookmakers – the bookies chain he founded. The bank served its demand for payment of the money on Mr Yates in April 2012.
Lawyers representing Mr Yates had argued before the High Court that the summons was invalid on several grounds including that the amount being sought by AIB was overstated. The validity of the summons was also challenged on the basis that Mr Yates was not served with a valid four-day demand notice and because AIB did not demand payment of the debt on more than one occasion before applying to have the summons issued. It was further claimed that before it sought to have the summons issued, AIB did not lodge all the required relevant documentation with the proper office.
AIB rejected those arguments and said that the summons was valid. Mr Yates was not present in court yesterday. In her judgment, Miss Justice Dunne noted that it was claimed on Mr Yates’s behalf that the amount sought by AIB was overstated in a number of ways. He had claimed there was an overpayment in respect of fees of €162,000 to the receiver of Celtic Bookmakers, Neil Hughes.
It was also claimed that the cost of the receivership would be a maximum of €100,000. These claims, the judge noted, were denied by both Mr Hughes and AIB.
Another issue was a claim that AIB continued to charge interest on the amount owed after the receiver was appointed to Celtic Bookmakers in January 2011.
Mr Yates, the judge said, had claimed that after Mr Hughes’s appointment it had been represented to him that interest running on the debts would be frozen.
When interest continued to accrue, Mr Yates claimed he was told by officials from AIB that these charges would not be pursued, the judge said.
However, a sum of €240,000 which accrued after January 2011 has been pursued by AIB. In reply, the judge added, AIB said that no agreement was reached with Mr Yates that it would suspend interest payments. On this basis, the judge said she was satisfied that the amount allegedly due from Mr Yates had raised issues that had to litigated separately outside the bankruptcy process.