Thursday, 20 June 2013

Ceisteanna (82)

Michael McGrath


82. Deputy Michael McGrath asked the Minister for Finance the number of National Assets Management Agency debtors whom the agency has learned have to date been declared bankrupt outside of this jurisdiction; the number of such bankruptcies in different countries; the way NAMA has responded to this pattern; the total amount owed to NAMA by those who have been declared bankrupt outside of this jurisdiction; if NAMA is currently contesting any of these bankruptcy proceedings; and if he will make a statement on the matter. [29999/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Deputy may wish to refer to NAMA's Annual Report and Financial Statements for 2012, which contain extensive information regarding the Agency's operations, including, as set out in pages 26-27 in particular, its insolvency activity and on the locus of debtor bankruptcy proceedings.

It is important to point out that debtors are entitled to petition to bankrupt themselves in other jurisdictions if they are entitled to do so under the laws of that jurisdiction. The deputy will be aware that for a debtor to avail of bankruptcy in any given jurisdiction he/she must first of all establish that jurisdiction as his/her centre of main interest (COMI). The establishment of COMI is a matter for the relevant authorities in the jurisdiction in which bankruptcy is sought. NAMA advises that in each instance of bankruptcy involving a NAMA debtor it reviews its options and selects the most appropriate method of ensure the best possible return for the taxpayer. NAMA advises that it is currently challenging bankruptcy applications on the basis of COMI in two instances and in a further case is supporting the application of another secured bank with a view to having bankruptcy proceedings take place in Ireland.

As advised in NAMA's Annual Report and Financial Statements, the Agency, as a secured creditor, is generally neutral on the locus of bankruptcy proceedings and its experience has been that the location has not tended to prejudice recoveries. This position is based in part on its positive on-going engagement with several bankruptcy trustees of NAMA debtors who have been adjudged bankrupt in the UK. The Agency also advises that the bankruptcy regime in the UK is well established, sophisticated and that bankruptcy trustees under the UK system possess extensive powers to compel production of legal and banking information, on a cross-border basis, from the bankrupt. These powers have been used in bankruptcy cases involving NAMA debtors to uncover significant undeclared assets.

NAMA further advises that the comparatively shorter duration of bankruptcy in, for example, the UK is not a consideration for the Agency as the bankrupt's assets remain in the control of the bankruptcy trustee long after the bankrupt may have been discharged from bankruptcy and any failure to make full disclosure may result in the period of bankruptcy being extended. NAMA advises that it challenges the release from bankruptcy of any debtor in instances where there is non-cooperation with the bankruptcy trustee.

I am advised by NAMA that a total of 56 NAMA debtors have been declared bankrupt: 11 in Ireland, 44 in the UK and 1 in the US. Debtors who have been declared bankrupt outside of Ireland had, by reference to the nominal or par value of loans, exposure to debt of approximately €8 billion at the time of NAMA's acquisition of loans from the participating institutions. NAMA has enforced over the assets securing these loans and continues to realise these assets. When a debtor goes bankrupt what is generally available is the remaining unencumbered or unsecured assets. The role of the bankruptcy trustee is, therefore, to realise any other residual unencumbered assets, including properties and cash, which the bankrupt may have and to make a distribution to the creditors including NAMA. The bankruptcy trustee can also seek to have the bankrupt contribute from post-bankruptcy earnings through an income payment order.