Former Anglo Irish Bank chairman Seán FitzPatrick is to ask the High Court to declare him bankrupt on Monday after the bank blocked a proposed settlement deal with his creditors.
Mr Fitzpatrick has liabilities of almost €150 million and had argued his creditors would do best under his proposed deal.
Mr Fitzpatrick also has substantial assets but the value of many of those has been affected by the property crash.
Mr Fitzpatrick had put together a scheme which was placed before a meeting of creditors this week but, after Anglo, his largest creditor, opposed the scheme, it could not go ahead.
At the creditors meeting, Mr Fitzpatrick told those attending he accepted full responsibility for “my own ruin” and expressed deep regret to all creditors. He also said he had, throughout his business dealings and during his time in Anglo, acted at all times in good faith and always believed he was acting prudently and properly.
Just before 1pm at the High Court today, Mark Sanfey SC, for Mr FitzPatrick, told Mr Justice Brian McGovern it was in circumstances where his proposed settlement could not proceed that Mr Fitzpatrick wanted to “pull the plug” on the process and to petition the court on Monday to be adjudicated bankrupt.
Because Anglo is Mr Fitzpatrick’s largest creditor, Mr Fitzpatrick had taken the view there was no point with proceeding with a private court sitting on Monday as he would not achieve the necessary majority to go ahead with his settlement scheme, counsel said.
That was the reason for coming to court, to inform it of developments in the same way an examiner would, he added.
The judge queried, if the court protection order which had restrained creditors moving against Mr Fitzpatrick as he sought to put a scheme together as lifted, there was any danger Mr Fitzpatrtick would be able to deal with his assets as he wished.
Mr Sanfey said he was instructed to provide an undertaking to the court that Mr Fitzpatrick would not deal with his assets. On the basis of that undertaking, the judge agreed to lift the protection order.
Mr Fitzpatrick’s bankruptcy petition will now be listed in the High Court bankruptcy list for Monday and all of his creditors are to be notified of the decision. Anglo would be able to outline its views then, Mr Sanfey said.
Today’s court hearing comes after Mr FitzPatrick offered his family home and half of his pension as part of a proposed settlement deal with his creditors under which they would be repaid part of their debts over time.
At a meeting in his Dublin solicitor’s offices earlier this week, Mr FitzPatrick apologised to creditors, saying the financial crisis had wiped out his net worth, which was based largely on shares in Anglo, AIB and Bank of Ireland.
The meeting was held to hear details of a proposed scheme of arrangement which would have given him time to repay creditors some of their debts as his assets are sold in an orderly basis over time.
State-owned Anglo, which is owed €110 million by Mr FitzPatrick, is blocking the proposed deal, leaving the former bank chief facing imminent bankruptcy.
His loans to the bank represent about 70 per cent of Mr FitzPatrick’s overall debts and his settlement proposal – which would have avoided bankruptcy – required the support of 60 per cent of his creditors based on the number and value of the debts.
Anglo asked the High Court last month to declare him bankrupt as the bank held more than 40 per cent of his overall debts and that any attempt to reach a settlement agreement was doomed to fail.