The article below was written by Una Leavy, Solicitor in Mason Hayes & Curran's Debt Recovery department for publication in the IICM Credit Focus, Summer 2012 Edition. © Copyright IICM. All rights reserved
The adjudication of bankruptcy made in The High Court of Justice in Northern Ireland in November 2011 against Sean Quinn former Chief Executive of the Quinn Group, following the presentation of his own petition, was successfully set aside through a subsequent application brought by The Irish Bank Resolution Corporation (formerly Anglo Irish Bank Plc) in December 2011. This was an important and encouraging decision for financial institutions across Ireland, who have been left to deal with the bad loans of some of Ireland's most well-known and formerly very high net worth individuals, many of whom have begun to make their way outside of this jurisdiction to present bankruptcy petitions elsewhere. The incentive lies in the fact that Bankruptcy Law in this country in its present state is generally viewed as oppressive and archaic. The governing legislation in this area has remained relatively unchanged since it was enacted in 1988, and the eventual possibility of discharge is far less optimistic here than in the UK. In Ireland, a bankrupt cannot apply for automatic discharge until a period of 12 years has elapsed since the date of adjudication under Section 85(1) of the Bankruptcy Act 1988. This is a recent provision introduced by Part 7 of the Civil Law (Miscellaneous Provisions) Act 2011, which at least permits the possibility of discharge for unsatisfied bankrupts (which had not been present before then). The same 2011 Act also provided for the possibility of discharge after 5 years at the discretion of the High Court in the event that all preferential creditors have been paid along with the Official Assignee's Expenses1. In the UK automatic discharge from bankruptcy is possible after just 12 months, and while it often takes longer, this is usually the result of non-cooperation by the debtor. Bankruptcy administration is also far better resourced and staffed in the UK, which is an incentive for a debtor as the prospects of rebuilding a life financially are far better if the process takes less time to complete.
IBRC v Quinn: Case background
Sean Quinn filed a debtor's petition before the High Court of Justice in Northern Ireland on the 10th November 2011 seeking that he be declared a bankrupt pursuant to the UK Insolvency Order 1989...