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Official Assignee in the spotlight
30 July 2010
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Few people in Ireland would have heard of low-profile civil servant Chris Lehane before this month. Lehane is the Official Assignee in bankruptcy – a court appointed official who is put in charge of the property and assets of bankrupt individuals.
Despite increasing levels of personal indebtedness in Ireland, there were only 17 bankruptcy declarations made in 2009. But the Office of the Official Assignee has been thrust into the spotlight recently thanks to the bankruptcy of the former head of Anglo Irish Bank, Sean FitzPatrick.
For the first time in the history of the State, a senior bank executive was declared bankrupt and Lehane was assigned to deal with FitzPatrick's assets and debts.
FitzPatrick's case is one of the largest non-corporate bankruptcy ever to come before the Irish courts, and the Official Assignee faces the less than enviable task of administering the former head of Anglo's estate for the next 12 years.
The role of the Official Assignee is essentially to take control of a bankrupt's assets, sell them off, and share the proceeds amongst the creditors.
Just about anything is up for grabs. All property held by the bankrupt vests in the Official Assignee for the benefit of creditors and any property acquired after bankruptcy also transfers to the assignee. The High Court can appropriate a bankrupt's salary and pension for the benefit of creditors and if a bankrupt happens to come into money – like a lottery win – that also has to be handed over. The bankrupt's post may even be re-directed to the Official Assignee if it's deemed necessary.
Essentially, the Official Assignee becomes a looming presence in the life of a bankrupt for 12 years.
In the case of FitzPatrick, the Official Assignee will have to tackle FitzPatrick's share of the family home, his investments (estimated to be worth €46 million) his pension, his car, and the cash in his deposit accounts.
But in yet another twist in the long-running FitzPatrick saga, Lehane may soon be taken off what is arguably his biggest assignment to date.
The High Court heard on Monday that Anglo Irish Bank is seeking to have a "trustee in bankruptcy" appointed to the case. The nationalised lender is owed in the region of €110 million from FitzPatrick and wants to appoint its own trustee who would replace the court-appointed official.
It is understood that Anglo wants the private trustee to oversee the sale of assets linked solely to borrowings from Anglo and will work with the bankrupt's other six banks to divide his unencumbered assets.
Ms Justice Elizabeth Dunne adjourned the case until September 22nd when the formal sitting of FitzPatrick's bankruptcy case will take place.
Even if Anglo do succeed in appointing their own assignee, the Office won't be lacking for work in the coming months. So far this year, there have been 12 bankruptcy declarations, significantly higher than in previous years.
And it seems that the Office is gearing up for a surge of activity in the coming months.
A few weeks ago, the Office issued a tender for at least three firms to establish a multi-party framework capable of delivering forensic accounting services for pending and possible bankruptcy cases before the High Court. The selected bidders will be expected to advise the Official Assignee in relation to the management of assets and liabilities both in Ireland and abroad and will be involved in asset tracing and investigations,
The Court Service is hoping to begin the framework agreement in early November.
Fitzpatrick may be Ireland's first high-profile bankrupt, but he almost certainly won't be the last and it looks like Lehane and his team will have their work cut out for them for the next few months, and indeed, years.
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