Seanie Fitz Declared Bankrupt

The face of Ireland's economic woes has been declared bankrupt.

Former Anglo Irish Bank chairman Sean Fitzpatrick became public enemy number one in Ireland following a series of revelations over the way that he operated the bank, which ended up being nationalised, costing the Irish taxpayer more than €22bn.

He was declared officially bankrupt at the High Court yesterday (Mon), after a last-ditch effort to reach agreement with his creditors collapsed.

Last week, Mr Fitzpatrick apologised to creditors at a private meeting in his Dublin solicitor's offices, saying the financial crisis had wiped out his wealth, which had been based mainly on shares in Anglo, AIB and Bank of Ireland.

He presented a proposal at the meeting, which would have given him time to repay creditors some of the money he owed them, through the orderly sale of his assets over time.

But Anglo, which is now State-owned, blocked the proposed deal.

It is owed €110m - about 40 per cent of Mr Fitzpatrick's overall debt.

In addition to Anglo, he also owes money to Friends First, Haven (a subsidiary of EBS), Bank of Scotland (Ireland), AIB, First Active, Ulster Bank and the Revenue.

Sources at the meeting told the Irish Times that his performance had been "strong, measured and matter of fact" and that he had come across as apologetic and embarrassed.

Asked by a Revenue official what he intended to live on, Mr Fitzpatrick said he only had his wife's pension.

Mr Fitzpatrick made no reference the controversies that have emerged about Anglo over the past 18 months.

Now that he has been declared bankrupt, his creditors can seize his assets and sell them off to reduce his debt.

Among the assets are his Greystones, Co. Wicklow home, and a valuable pension built up over many years with the bank.

His chief asset is a Nigerian oil well known as the Ekeh field - and is believed to be worth around $50m.

Although the State-owned Anglo is anxious to secure it, there is some dispute among other creditors about the bank's security on it.

Anglo Irish Bank asked the High Court in June to declare him bankrupt, and that hearing was due to take place yesterday (Mon).

But lawyers for Mr Fitzpatrick went to the High Court last Friday to say he had decided to "pull the plug on the process at this stage" himself.

Mr Fitzpatrick resigned as chairman of Anglo Irish Bank in December 2008 after it emerged that he had loans of €81m with the bank.

He had hidden those and other loans for eight years by transferring them to another bank before Anglo's accounts were audited.

At one stage, in 2007, he owed €129 million to the bank he ran.

The money was used to finance property investments, film finance deals, private equity and to purchase shares in Anglo itself.

The controversy, when it emerged, also led to the resignation of the Financial Regulator Patrick Neary.

The matter is being investigated by the Office of the Director of Corporate Enforcement (ODCE) and the Garda Bureau of Fraud Investigation.

Mr Fitzpatrick was arrested and questioned by Gardai on the day following St Patrick's Day this year.

The ODCE is also looking into loans of €451m that Anglo, under Fitzpatrick's watch, made to "a golden circle" of 10 longstanding clients, who then used the money to buy shares in the bank itself.

At the time it helped to keep Anglo's share prices high.

Only a tiny portion of that money has been repaid.

The 60-year-old has come to symbolise the "crony capitalism" - the cosy circle of bankers, politicians and developers - which contributed to Ireland's economic implosion.

Not only was he involved in questionable practices at his own bank, but under his leadership, Anglo was transformed into one of the biggest property lenders in the country.

He was also close to many senior Fianna Fail politicians, and had been the government appointee to several boards including the Dublin Docklands Development Authority, and Aer Lingus.

Following yesterday's declaration of bankruptcy, he now faces financial ruin.