O'Donnell bankruptcy bid opposed by bank

 

BANK of Ireland yesterday opposed efforts by property investors Brian O’Donnell and his wife, Mary Patricia, to file for bankruptcy in London, insisting it would question claims that they are resident there.

The O’Donnells have filed a debtors’ petition for bankruptcy, with their solicitor, Simeon Gilchrist, telling registrar Peter Nicholls that the application is “urgent” and that they are “seeking the protection of the court from creditors”.

During the peak of the property boom, the couple had established property syndicates that invested up to €2 billion in some top-flight properties around the world, including the headquarters of the British department of education in Westminster.

They are the latest among a series of Irish property investors, or developers to seek to declare bankruptcy in London, including Priory Hall developer Tom McFeely, whose application will be opposed today in London by one of his creditors, Theresa McGuinness.

The crux of the argument to be heard on a date after mid-July between the O’Donnells and Bank of Ireland is the O’Donnells’ claim that their “centre of main interest” now lies at their Barton Street home in London – a property that is already in the hands of receivers.

The bank has already lodged a creditor’s petition before the Irish courts seeking the O’Donnells’ bankruptcy, but counsel for the bank Hanna Thornley said that the bank has made it clear that it will halt such proceedings until jurisdiction is decided by the High Court in London.

Mr Gilchrist said the petition should be dealt with as quickly as possible, saying there is a danger otherwise that the petition “will disappear into the long grass for an unconscionably long time”, he told the High Court registrar.

The O’Donnells, he said, are “left exposed” to debtors in Ireland unless the London petition is marked as urgent, leaving open the danger that “we will have dissipated the estate and incurred costs” when the O’Donnells’ affairs are finally resolved.

In his ruling, the registrar noted that Bank of Ireland was “content” to have a decision on the Donnells’ centre of main interest to be decided in London, even though it believes the O’Donnells should not have presented the petition “in this jurisdiction”.

The couple will have to be cross-examined, he ruled, over their claims to be permanently based in London, though the registrar noted that the couple’s legal team has argued “with some strength” that this is the case.

A witness statement from a Bank of Ireland executive about the O’Donnells’ affairs has been presented to the court, though Mr Gilchrist complained he had received sight of it only on Tuesday.

The case will come back before Registrar Nicholls on July 5th. He said he would order that the issue be listed for trial “no longer than weeks after” July 19th because of “the justified and understandable’ desire of the O’Donnells to have it heard expeditiously. Later, Mr Gilchrist, speaking with journalists after the 30-minute hearing, dismissed suggestions that the O’Donnells are seeking bankruptcy under English and Welsh law rather than Irish law because the former is “softer”.

Mr Gilchrist said bankruptcy law in England and Wales is “sophisticated” and balanced the interests of creditors and debtors fairly. The law in Ireland, he pointed out, was written in the 19th century.

The English and Welsh law did not mean that someone could be clear of bankruptcy within 12 months, compared with 12 years in Ireland, he said, saying that this interpretation is consistently put forward by the Irish media. Instead, a bankruptcy trustee appointed by the courts in England and Wales has the right to interfere in the affairs of a bankrupt for as long as necessary to finalise the estate’s affairs, though such trustees have an obligation to finalise matters as quickly as possible.