Debt-ridden couple refused bankruptcy in England
Posted: 27th June 2013
A couple who are facing debts in excess of €70 million in Ireland following the collapse of their property investment business have failed to convince the Court of Appeal that they should be declared bankrupt in England on the basis that they have established their centre of main interest (COMI) in this country.
Prior to the demise of Ireland’s ‘Celtic tiger’ economy, the couple had amassed a property empire that spanned the world, with office and retail buildings in Dublin, London, Stockholm and Washington DC. Their assets included a mansion near Dublin, a country estate in Galway, a holiday home in the French Alps, a substantial home in central London and a collection of classic cars.
Their principal creditor, the Bank of Ireland, obtained a judgment against them at the Irish High Court in 2010 fo €71.5 million, plus costs. The couple moved to London shortly afterwards and were accused of ‘bankruptcy tourism’ by the bank which claimed that they were attempting to take advantage of what they perceived to be the more benign debt recovery regime prevailing in England.
The High Court in London subsequently rejected the couple’s plea that they had established their COMI in England and dismissed their bankruptcy petitions. The Court found that, so far as their creditors were concerned, their business operations always had been, and remained, based in Dublin.
In the Court of Appeal, the couple argued that it had not been necessary for them inform each and every one of their creditors of their change of COMI. It was submitted that their settlement in England was evidenced by their regular shopping trips to Fortnum & Mason, visits to the capital's theatres and a plot that they had reserved for themselves at Westminster's Mill Hill Cemetery.
Refusing permission to appeal, the Court ruled that any challenge to the judge’s decision would have no reasonable prospect of success. The judge had taken an entirely conventional approach to the law and criticisms of his findings of fact were not a proper basis on which to mount an appeal. The Court also declined to refer the matter to the European Court of Justice.