Lawyers examined FitzPatrick dealings for fraud

ARRANGEMENTS ENTERED into by former banker Seán FitzPatrick earlier this year were examined by lawyers to see if they were fraudulent in the light of his application for bankruptcy.

The Official Assignee in Bankruptcy, Chris Lehane, sought advice from senior and junior counsel as to whether certain transactions and arrangements entered into by the former chairman of Anglo Irish Bank in March were in breach of the bankruptcy act.

Files in Mr Lehane’s office show that the issue was among a number listed by the solicitors’ firm that acted for him in the case, McGrath O’Donnell Associates, of Rathgar, Dublin, in their claim for fees of €28,357.

The filings do not disclose the transactions that prompted the seeking of advice or the nature of the advice received. The advice concerned section 57 of the 1988 Bankruptcy Act, which allows for the undoing of acts in the half-year prior to being made a bankrupt if they were designed to give an advantage to one creditor over others.

Mr FitzPatrick was made a bankrupt in July.

The claim for fees from the McGrath O’Donnell firm shows that in that month it emerged that a debt due to Cove Capital, a business operated by former Anglo director Lar Bradshaw, appeared a lot smaller than had originally been envisaged.

“The claim submitted by Cove Capital required considerable consideration,” according to the document. “Initially it was noted that the claim was for a sum in excess of €16 million.

“However, as the matter progressed it appeared that the true value of the claim was in the region of €1 million and possibly less and when this came to light it was necessary to attend on the Official Assignee, noting that the net result of the reduction in the claim by Cove Capital meant that Anglo Irish Bank would have 90 per cent of the debts.”

Mr FitzPatrick was adjudicated a bankrupt on July 12th. Four days later at a meeting in Mr Lehane’s office the solicitors from McGrath O’Donnell discussed a range of matters, according to the firm’s claim for fees.

At the meeting “it was agreed to permit the bankrupt to take a short holiday”.

On July 22nd the solicitors attended a three-hour meeting in Mr Lehane’s office which was also attended by Mr FitzPatrick and his solicitors.

A statement of affairs filed to the High Court in September in association with Mr FitzPatrick’s proceedings showed he had a net monthly income of €188 per month and net debts of almost €100 million.

Mr Fitzpatrick stepped down as chairman of Anglo Irish Bank in December 2008 after admitting that he had hidden more than €80 million in secret loans from shareholders.