Developers file for bankruptcy in UK

MINISTER FOR Finance Michael Noonan has confirmed that 20 Irish developers managed by the National Asset Management Agency (Nama) have declared themselves bankrupt in Britain.

Mr Noonan said Nama was “generally neutral” on bankruptcy location and did not believe debtors declaring bankruptcy outside the Republic would affect its debt recovery position.

“Nama does not see the success of developers declaring bankruptcy in the UK rather than Ireland as significantly prejudicing its potential recoveries from the bankruptees,” he said. “I am further advised by Nama that in the case of debtors directly managed by the agency, approximately 20 debtors have successfully applied for bankruptcy in the UK.”

Mr Noonan was responding to a parliamentary question from Fianna Fáil finance spokesman Michael McGrath, who had asked him to detail the approximate loss Nama had suffered as a result of developers declaring bankruptcy in Britain and the number of cases involved.

Mr Noonan said Nama as a secured creditor was “generally neutral on the locus of bankruptcy proceedings”, as long as the location did not prejudice its potential recoveries from a debtor. Nama is challenging the release from bankruptcy in Northern Ireland of one debtor in the courts on the grounds of non-co-operation.

Mr McGrath described the move by developers as “brazen” but said he was not surprised by the revelation.

The insolvency period in the North and Britain is one year. The Government, which has been keen to ensure people are not incentivised to affect insolvency outside the jurisdiction, has introduced the Personal Insolvency Bill, which will allow debtors to emerge from bankruptcy after three years rather than the current 12 years.

Meanwhile the Construction Industry Federation (CIF) has called on banks to provide loans for major commercial office space in Dublin, citing concerns at IDA Ireland about a possible future shortfall in suitable office accommodation for multinationals that want to locate or expand here.

CIF director general Tom Parlon said there was “clearly a shortage of modern office buildings” in the city centre.

On Thursday, the IDA warned that there were only four or five buildings in Dublin capable of housing multinationals setting up “decent-sized” projects and these could be quickly exhausted if the State’s inward investment agency was successful in attracting multinational investments expected to be “in play” in the coming months.