Inside the world of business
New insolvency legislation could benefit FitzPatrick
‘TODAY MARKS the two-year anniversary of Sean FitzPatrick’s declaration for bankruptcy and it’s worth noting on this landmark date that the former Anglo Irish Bank chairman could be one of the beneficiaries of the personal insolvency legislation published last month.
The new legislation reduces the bankruptcy term from an onerous 12 years to three years and the changes apply not just for new debtors filing for bankruptcy but to existing bankrupts as well. This means that FitzPatrick could emerge with a fresh financial start this time next year, free of the €148 million in debt that he disclosed in July 2010.
There are, however, grounds on which FitzPatrick’s term of bankruptcy could be extended by up to a further five years, until July 2018, under the new legislation.
Speaking in general about the new legislation, Barry O’Neill, a partner at law firm Eugene F Collins, tells us that an objection can be made by the official assignee in charge of a bankrupt’s affairs or by a creditor but the grounds are “limited to a lack of co-operation or disclosure” by a bankrupt individual.
FitzPatrick’s former colleague at Anglo, the bank’s former chief executive, David Drumm, is not facing an easier ride out of bankruptcy in the US where Irish Bank Resolution Corporation, as Anglo is now known, has objected to him being given a new start financially.
A Boston judge will decide at trial next January whether Drumm can leave bankruptcy or whether the bank can keep him on the hook, potentially for the rest of his life, for the €8.5 million he owes his former employer from any future earnings or gains.
It will be interesting to see how the same bank, FitzPatrick’s biggest creditor, holding debts of more than €100 million, will view his level of disclosure and co-operation ahead of his third anniversary as a bankrupt next year.
INM turns to South African newspaper titles for possible sale
IN LIGHT of Independent News & Media’s substantial debt burden, flogging off its international assets has always seemed like a sensible way to proceed. The O’Reilly-era sale of the loss-making London Independent titles and its hand in the closure of the Sunday Tribune already feels like distant history, and so it is to South Africa that the group is turning next.
The Financial Times reports that INM has appointed Hawkpoint and Investec to advise on the possible sale of its South African publishing business, which it says could be valued at about €250 million.
No decisions on the sale have yet been taken, but if this value can indeed be realised from the business, which publishes Pretoria News and the Cape Times and owns the country’s largest property website, then it would indeed go some distance towards reducing the group’s net debt of €426 million – once all the sale advisers have been paid, naturally.
The sale, if it goes ahead, would result in the further retreat of the old INM media empire, although it still retains its interest in the Australasian company APN – for now.
INM abandoned an attempt to sell its 39 per cent stake in APN in 2009 after it failed to find a buyer at an “acceptable” price, but Australia’s national daily The Australian reported in the wake of Gavin O’Reilly’s departure from the company in April that a fresh attempt to sell its stake, now at 29.5 per cent, may be on the cards, citing analysts from banking group Macquarie.
The South African sale would result in a significant shrinking in the size of INM, as the group’s operations in the country account for a third of its revenues and half of its operating profits.
The disposal may be complicated by the South African government’s concerns about media ownership – the chairman of a parliamentary communications committee has signalled that the business should not be sold to a foreign buyer.
'Stubbs' not real question for Reilly
MINISTER FOR Health James Reilly is having a torrid week. In the day job, he is having to defend spending over-runs that are already drawing concern from the troika overseeing the progress of Ireland’s bailout and from Cabinet colleagues with an eye on the pain that will have to be imposed in the Budget at the end of the year.
Now he is faced with explaining how he has become the first Cabinet minister in memory to find himself listed in Stubbs Gazette.
It is difficult not to have some sympathy with the minister. He agreed in 2000 to invest with four others in a nursing home in Tipperary. For one reason or another that didn’t happen and the previous owners of the property eventually took court action against the consortium. Back in February, the four consented to judgment against them of €1.9 million – although that became public only after Mr Justice Peter Kelly reminded counsel, notwithstanding the confidential nature of the settlement, that judgment orders had to be made in public. A stay on that order was given till the end of April. However, once the judgment was activated, it was inevitable it would appear in Stubbs, where all such orders are listed.
Those who have delighted in the Minister’s discomfort must have known this, which makes the ensuring brouhaha slightly comical.
It has been left to the public to get to the more critical element of the case. In a clatter of emails and texts to radio stations yesterday, they questioned the probity of a Minister for Health owning a nursing home when he made policy in the area. Of course, Reilly wasn’t in politics when the deal was done, but was putting the matter at arms’ length on assuming office really enough?
Quote of the day
I know that the measures that I have announced are not pleasant but they are necessary
– Spanish prime minister Mariano Rajoy announcing his government’s fourth set of austerity measures in seven months
A raft of data on the Irish economy is due, including consumer prices and balance of payments, alongside the offical publication of economic growth figures which were leaked inadvertently yesterday
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