STATE-OWNED Anglo Irish Bank has taken legal action against the bank’s former chairman Sean FitzPatrick in an attempt to recover unpaid loans of €70 million.
The bank’s efforts to recover Mr FitzPatrick’s outstanding loans have intensified since the appointment of Mike Aynsley as chief executive of Anglo last September.
The bank gave Mr FitzPatrick until this week to provide a repayment schedule for his loans.
A summary summons seeking judgment against Mr FitzPatrick for €70.4 million was lodged with legal papers in the Central Office of the High Court yesterday. The case is scheduled to be heard by the Commercial Court.
The bank had no comment on its legal action against Mr Fitzpatrick. This is the second lawsuit taken by Anglo against a former senior executive.
The bank is pursuing former chief executive David Drumm for unpaid loans of €8.3 million, including €7.7 million provided to buy shares in the bank.
Minister for Finance Brian Lenihan signed off on the lawsuit as Anglo must seek approval to take legal actions against former directors over outstanding loans under the bank’s relationship agreement with the Government.
“I have always urged the bank to take every step in their power to recover the amount of these loans and I am glad that the bank is putting that in motion in relation to Mr FitzPatrick,” Mr Lenihan said last night.
Mr FitzPatrick owed Anglo €106.5 million at the end of March 2009, according to the bank’s most recent financial statements.
However, he reduced that sum by about €20 million through the sale of assets, such as properties, share portfolios and investments, over the past year.
Mr FitzPatrick owes €70.4 million across three loan facilities, the largest being for a sum of €67 million, which is mostly secured on shares in Anglo. The bank’s shares are virtually worthless following the nationalisation of the lender.
Mr FitzPatrick also owes $35 million to $45 million (€32 million) on a joint 50-50 loan with Lar Bradshaw, a former non-executive director at Anglo, on an investment in a Nigerian oil field.
This loan is not subjected to the bank’s legal action. Anglo has given Mr FitzPatrick and Mr Bradshaw time to sell their interest in the Ekeh oilfield.
Sources said Anglo may take further action on this loan over the coming two to three weeks.
Other assets held by Mr FitzPatrick are up for sale in an attempt to reduce his outstanding borrowings. He is also believed to hold investments in a number of funds. Among the investments sold by Mr FitzPatrick to reduce his loans was a share in a casino in Macau, the former Portuguese colony in the south of China.
He resigned in December 2008 as chairman of Anglo after it emerged he had hidden his loans over eight years by moving them off the bank’s books before Anglo’s financial year-end using short-term loans from Irish Nationwide.
The Government nationalised the bank the following month, saying that revelations about Mr FitzPatrick’s loans had “caused serious reputational damage”.
