FORMER ANGLO Irish Bank chairman Seán FitzPatrick faces a court ruling declaring him bankrupt within days after the bank blocked his bid to agree a settlement deal with his creditors.
Mr FitzPatrick apologised to creditors at a meeting in his Dublin solicitor’s offices, saying the financial crisis had wiped out his net worth, which was based largely on shares in Anglo, AIB and Bank of Ireland.
The meeting was held to hear details of a proposed scheme of arrangement which would give him time to repay creditors some of their debts as his assets are sold in an orderly basis over time.
State-owned Anglo, which is owed €110 million by Mr FitzPatrick, is blocking the proposed deal, leaving the former bank chief facing imminent bankruptcy.
His loans to the bank represent about 70 per cent of Mr FitzPatrick’s overall debts and his settlement proposal – which would have avoided bankruptcy – requires the support of 60 per cent of his creditors based on the number and value of the debts.
Anglo asked the High Court last month to declare him bankrupt as the bank held more than 40 per cent of his overall debts and that any attempt to reach a settlement agreement was doomed to fail.
The case is due to come before the court again on Monday when bank creditors are scheduled to vote on the proposed settlement. A vote is unlikely to proceed given Anglo’s opposition. In advance of Anglo’s application in court on Monday to have its former chairman declared bankrupt Mr FitzPatrick may make the application to the court himself.
“If he is going to be made bankrupt, rather than give them the pleasure, he may decide to apply to the court himself,” said a source familiar with his situation.
Mr FitzPatrick has overall debts of about €150 million but faces a shortfall of about €80 million between his assets and liabilities.
He told creditors yesterday that he never intended to leave them short and his financial position had been devastated by the collapse in the value of bank shares.
His 4.5 million shares in Anglo were worth €80 million at the peak of the boom in 2007 but are effectively worthless after it was nationalised in early 2009 – weeks after it emerged he had hidden multimillion-euro loans over eight years.
Yesterday’s meeting at O’Grady’s solicitors’ offices in Dublin city centre began at 9am and lasted just over an hour. Mr FitzPatrick addressed creditors before handing over to his financial adviser, Bernard Somers, an insolvency accountant and former AIB non-executive director, to outline his proposal.
A well-placed source described Mr FitzPatrick’s performance as “strong, measured and matter of fact”, saying he came across as apologetic and embarrassed by the situation but that he spoke well.
Asked by a Revenue Commissioners representative what income he intended to live on, Mr FitzPatrick said he only had his wife’s pension.
Mr FitzPatrick made no reference to the controversies that have emerged at Anglo over the past 18 months. His advisers told creditors that a scheme offered them the best return and that bankruptcy would be protracted and incur heavy costs. A number of creditors said that they supported his proposal.
Apart from Anglo, his creditors include investment firm Friends First, Bank of Scotland (Ireland), Ulster Bank and sister bank First Active, EBS Building Society’s subsidiary Haven, AIB and Revenue.
Mr Somers said talks with the creditors had been cordial.
It emerged that a Dublin private equity firm, Cove Capital, of which former Anglo non-executive director Lar Bradshaw is a director, is owed €16.7 million by Mr FitzPatrick.
Mr FitzPatrick told the meeting he intended Anglo to have security over a Nigerian oil field, his share of which he has valued at $50 million, though there is a dispute over the bank’s security on the field.
Gardaí interview Anglo bank staff: page 20