Two Irish property developers, who were declared bankrupt in Britain leaving more than €200 million in debts behind them, have been penalised after an investigation found that they had “cynically” attempted to hide assets from creditors.
The two men, Mr Patrick Gerard Byrne and Mr Martin Doran had separately “sought to cynically exploit the bankruptcy regime by moving significant funds beyond the reach of their creditors and then wiping out their debts through bankruptcy”, the UK Insolvency Service declared.
Condemning the men’s action, the Insolvency Service’s Mr Allan Mitchell said: “They thought they could wipe these debts out in a year and move on. They transferred money to friends, relatives and associates – anyone but their creditors.”
Mr Byrne (44), was declared bankrupt in Durham County Court in November 2011 with debts of more than €100 million, after he had moved to Spennymoor, Co Durham from his home at Old Town, Athgarvan, Newbridge, Co Kildare.
However, the Official Receiver subsequently found that he all but emptied a National Irish Bank account, which had held €1.2 million in late April 2012, in the months before he opted to become bankrupt in Britain.
He transferred €500,000 to his estranged ex-wife, the Insolvency Service said yesterday, claiming this was a settlement to release him from any financial obligations to the marital home, which was in negative equity.
He also transferred €500,000 to the niece of a business associate, claiming this was as repayment of a loan; €114,000 to his sister and €82,800 to a solicitor – the latter two payments, he said, were because his sister had remortgaged her home to lend him money.
“By 9 May 2011, the balance of his account was just under €2,000. There were no written agreements in relation to any of these transactions, so it was impossible to corroborate any of them, making it more difficult for the authorities to recover these funds,” said the Insolvency Service.
Under British law, bankrupts can be freed from restrictions after just a year, rather than the 12 years than can apply in Ireland, but this requires that they fully co-operate with the official receiver and do not attempt to hide assets from their creditors.
Mr Byrne’s account to the receiver came under scrutiny after it emerged that he owned a mortgage-free property worth £76,000 in Holyhead, Wales, which he hadn’t declared in his bankruptcy petition.
Instead of being released from bankruptcy, Mr Byrne will now be subject to restrictions for nine years that will prevent him acting as a company director, while he must disclose his status to anyone with whom he tries to do business. Source: The Irish Times