As you know, the focus on here is NAMA, and we have been tracking the NAMA developers who have shimmied over to the UK (and US) to secure bankruptcy under terms which are a great deal more lenient than those available in Ireland. This is the current list, and it may not be exhaustive.
In January, 2013, efforts were made to obtain from the UK’s Insolvency Service a list of bankrupts who had give addresses in Ireland as previous addresses. Unfortunately, the Insolvency Service does not have an advanced search function, and the Service declined to provide the information. A request under the UK’s Freedom of Information legislation was subsequently lodged which sought an electronic list of names and addresses of people who had obtained bankruptcy orders since 30th November 2009 and who had provided a previous address which included the Republic of Ireland.
On Friday last, the request was responded to. The Insolvency Service says that their records of individuals with Ireland in their previous addresses only cover October 2010 to the present day and there have been a total of 136 cases.
However the Insolvency Service goes on to say that under their bankruptcy legislation, they cannot give details of people who are no longer on the Insolvency Register. This, incidentally, seems to contrast with Ireland where the name-and-shame approach means that insolvency is likely to be recorded and publicly available for time immemorial.
What the UK’s Insolvency Service has done is provided a list of 75 records of people with Irish addresses whose bankruptcy has yet to be discharged. Some people have given more than one Irish address and in total there appear to be 61 individuals on the list who will have declared bankruptcy in the past 12 months. (click to ENLARGE)
What was immediately interesting about the list was the omission of our NAMA developers. None of them appear on the list. Most of the NAMA developers provided Irish addresses, though the address might just be “Dublin” or “County Kildare” and others will have a full Irish address which includes “Ireland”. This was queried on Friday and the Insolvency Service has yet to clarify the omissions or whether there are other omissions. This blogpost will be updated with any amended list.
In the past year, there were an estimated 30 bankruptcies in the Republic of Ireland. So, 61 (at least) bankruptcies in the UK means there are more Irish people being declared bankrupt in UK than in Ireland.
On 26th December 2012, President Higgins signed the Personal Insolvency Act 2012 into law. However, Minister for Justice and Equality Alan Shatter has still now announced a commencement day or establishment day, so you still can’t seek to use the processes set out in the Act. What is the hold-up? Partly, it’s the slowness with establishing the Insolvency Service, but remember Minister Shatter only introduced the legislation because he is being frog-marched into it by the IMF, which has included it as a term of the bailout. There is no political will at the top of Fine Gael or Labour to provide desperately needed bankruptcy reform in Ireland, and the judgment on here is that they would prefer the legislation to fade away.
But as things stand, we are expecting to have the Act up and running by September 2013. Minister Shatter says he expects 3,000 bankruptcies in a year, which would compare with 60,000 in the UK which has 15 times the population. In other words, we are still expecting fewer bankruptcies pro rata than the UK even with the new Act, which remember will provide a 3-year bankruptcy period compared to 1-year in the UK. And given the crisis we have undergone with GDP down 7%, with unemployment at 14.6%, with little if any domestic growth in the economy, with 87,000 emigrating annually, with residential property down 50% and commercial property down 67% and development land down 90%, we should have a huge pent-up demand for bankruptcy.
There have been recent moves by Minister Shatter to persuade the British authorities to be more stringent in granting bankruptcy orders to Irish citizens. But this approach is to ignore the EU-wide rules on centres of main interest (or COMIs), and despite the recent failure of the Brian and Patricia O’Donnell to secure bankruptcy in the UK (which is presently being appealed) and despite IBRC’s success in having Sean Quinn’s bankruptcy overturned in Belfast, for most people, UK bankruptcy is still just a boat- or plane-ride away for six months to establish a COMI and it mightn’t even require that, there has been a noticeable increase recently in developers acquiring addresses in Northern Ireland.
UK bankruptcy for Irish citizens remains the only viable route to resolving large un-payable debts.
UPDATE: 10th February, 2013. The spreadsheet as provided by the Insolvency Service is here.