FORMER ANGLO Irish Bank chairman and chief executive Sean FitzPatrick will be unable to act as a company director or manager after he is declared bankrupt by the High Court on Monday.
The one-time bank executive who helped grow Anglo to be the third-largest domestic lender will also be unable to borrow a loan for more than €650 without disclosing that he is a bankrupt.
All assets and property owned by Mr FitzPatrick will come under the control of the official assignee, the court officer who monitors the financial affairs of bankrupt individuals, after Monday’s hearing.
Any salary, income or pension will also go to the official assignee.
Mr FitzPatrick will also have to inform the assignee about any property he acquires in future.
Following bankruptcy, all creditors lose their right to recover their debts independently and must deal with the assignee in Phoenix House in Dublin 7.
Certain payments or property transfers made to a creditor in preference to others in the six months prior to being declared bankrupt may also be held to be invalid under bankruptcy law.
Bankruptcy is more onerous in Ireland than in other countries. Individuals can only be discharged as a bankrupt once their debts and the costs of their bankruptcy is covered or after 12 years have elapsed, all their property has been disposed of and that it would be reasonable to discharge them.
Mr FitzPatrick’s bankruptcy could take more than 12 years owing to the scale of his assets and liabilities, and his involvement in large investment syndicates. Sources familiar with his financial position said they believed it could be processed within 12 years.
Beauchamps solicitors said in a report last December that bankruptcy law was “antiquated and badly needs to be modernised”.
Bankruptcy in Ireland was “unwieldy, expensive and very heavily court-controlled”, they said, while in England and Wales bankrupts can resolve their financial positions in a much shorter period under much more flexible and debtor-friendly procedures.
The Government has said that it is considering reducing the 12-year period required for the discharge of a bankrupt to six years or less.
Minister for Justice Dermot Ahern said in May that a comprehensive overhaul of bankruptcy legislation was required and that the Government was awaiting detailed proposals from the Law Reform Commission on the issue.
In the meantime, there could be a swift amendment to the legislation to reduce the discharge period for bankrupts, he said.
