DEVELOPER Paddy Kelly, for decades one of the biggest players in the property sector, has told the Commercial Court that he is exploring the possibility of a bankruptcy procedure.
Mr Kelly said in an affidavit that his liabilities exceed his assets and that he had not been able to honour some of his financial commitments.
In a radio interview last year, Mr Kelly said he was indebted to the tune of “hundreds of millions” of euros but said that was no great burden on him.
However, Mr Justice Peter Kelly heard yesterday that Anglo Irish Bank moved during February to stop further drawings on a facility it granted him last year. The bank’s manoeuvre had a “dramatic impact” on his ability to access funds to discharge his rental obligations.
Sources close to Anglo, while declining to comment on its business with Mr Kelly, said the development did not reflect any decision by the bank to generally cease the forbearance it was exercising in relation to big clients who were unable to service their loans.
Anglo continued to deal on a case-by-case basis with clients who are under financial pressure, the sources said.
Mr Kelly, Clonmore, Shrewsbury Road, Dublin, made the disclosure in proceedings before Mr Justice Kelly yesterday.
Under a settlement of a case related to a share purchase agreement, Mr Kelly consented to the court making an order requiring him to pay rents of €131,000 to insurance broker Hugh McGivern.
Mr Kelly said he simply could not give assurances to Mr McGivern as to his ability to discharge the sums, due on foot of rental obligations on certain premises operating the Mango ladies fashion franchise. It was a matter of “great personal regret” that he had not been able to honour his financial commitments, whether to Mr McGivern or others.
Mr Justice Kelly said a “serious situation” was disclosed from the affidavits, adding he would not put a stay on the judgment order as there may be “a rush to judgment” by other creditors in light of what was disclosed.
Mr McGivern had also sought an order directing Mr Kelly to provide a full statement of his assets and liabilities within and outside the jurisdiction but that issue has been adjourned for two weeks as there was no agreement on that.
The position now “is that my liabilities exceed my assets.
“I have been very concerned about this situation for some time as the credit crunch and economic downturn have progressively worsened,” Mr Kelly said