It was stark yesterday morning to hear the Independent TD for Wicklow and east Carlow, Stephen Donnelly on radio call on insolvent Irish people to emigrate rather than submit to the new personal insolvency processes. Mind you, it is stark to compare and contrast the new Irish processes and those available in the UK, and it is no surprise at all that more than 20 NAMA developers have thus far filed for bankruptcy outside this jurisdiction. Indeed some like John Fleming, Ray Grehan, Danny Grehan and Michael Doran have already been discharged and are financially reborn after 12 months.
We normally learn of NAMA bankruptcies from journalist Gavin Daly at the Sunday Times but recently creditors have been liaising with the UK courts and the UK Insolvency Service and have been able to act in advance of bankruptcy hearings. We know that publican David Cullen against whom NAMA obtained a €29.1m judgment in March 2013, was set to have a bankruptcy hearing on 9th April, 2013 though he has not yet been recorded as bankrupt at the UK Insolvency Service.
We learned last week that another NAMA debtor John Fraher is seeking to be declared bankrupt in the UK. John has moved to the UK and now lives in Gerrard’s Cross, Buckinghamshire, England a district whose average house price is the most expensive homes in the UK. John’s UK bankruptcy hearing is set to be heard on 17th May 2013, and if he is successful, he should be declared bankrupt soon thereafter. NAMA moved against John in January 2013 and the background to the case is here – in summary NAMA is seeking a €5.5m judgment against the Tipperary businessman who is defending the claim. Last week, the case came before the Commercial Court division of the High Court where the redoubtable Judge Kelly has fast-tracked the matter for an imminent hearing.
This is the list maintained on here of 23 NAMA bankruptcies outside Ireland. The above two would make 25 and that list may well be incomplete. How will this Government justify the still-draconian terms of the new insolvency regime when such large numbers are emigrating for (relatively) quickie bankruptcies?
NAMA Wine Lake 
The Irish State is morally bankrupt. It’s one thing for developers and Ben Dunne to advocate bankruptcy tourism, but when Stephen Donnelly is advising people to go you know you’ve got a problem.
Effectively the rule of law is breaking down when it comes to mortgages, finances, bankruptcies and debt. There has been too much moral hazard at the top, too little consequences, and too much reward from the proceeds of crime in the banks. And this is all before you consider the judges beginning to kick.
You cannot enforce something as absurdly draconian as the PIA legislation in such an environment. Even the Germans would have trouble making this one stick. To suggest that Ireland, with its weak courts, unpopular government, dysfunctional courts, and disgrunted populace is going to be able to enforce this is ludicrous.
If waves of people do actually end up entering these agreements, we will then be in very serious trouble. Once word leaks out in three or four years about the lenient treatment of the DSAs — their holidays, third cars, and children’s university degrees all paid for — the PIAs living on porridge and pasta are going to be enraged. We could be looking at ~100,000 pent up households spontaneously exploding in 3-4 years time.
Incidentally, what are your plans for the 1916 centenary?
Ireland’s first real revolution?