Former Anglo chairman Sean FitzPatrick is expected in the near future to seek court approval for an agreement with his big creditors – mainly the taxpayer-supported Anglo – that will keep the former bank boss out of bankruptcy.
FitzPatrick will "imminently" seek a so-called scheme of arrangement, an alternative to him being declared bankrupt, a person with knowledge of the matter has told the Sunday Tribune.
The former Anglo Irish chairman owes the bank at least €70m in director loans he controversially borrowed over many years and owes the lender other smaller amounts.
Striking an agreement with Anglo Irish, his largest creditor by a significant size, will mean any court-approved scheme would need to be supported by Minister for Finance Brian Lenihan.
FitzPatrick's legal adviser, Michael Staines, was not available for comment on Friday. The legal scheme of arrangement, if approved, will give FitzPatrick some measure of privacy. It may prevent journalists picking over the details of his remaining assets and investments he holds around the world and also stop any parliamentary questioning of the nature of the big personal debts he owes the taxpayer-supported lender.
As an alternative to bankruptcy, the scheme also allows the debtor to avoid certain disqualifications if he were to become bankrupt.
The court-supervised scheme will require the support at a 'private sitting' of three-fifths of creditors both by number and by value of the debt the creditors are owed. FitzPatrick may cross the second of those hurdles easily because a huge chunk of his debts are owed to Anglo Irish.
A court granting a scheme of arrangement would prevent FitzPatrick, as a so-called "arranging debtor", from selling any assets without its approval. FitzPatrick would also have to attend a preliminary meeting with his creditors. At the subsequent 'private sitting' FitzPatrick would need the support of a clear majority of his creditors by number and by value for the scheme to proceed.
Lenihan would be involved in any approval because he has powers under a "relationship framework" established to guide his dealings with Anglo Irish.
The framework says that Anglo Irish must have the minister's consent on "certain key issues". These include "entering into or varying any transaction or arrangement between Anglo Irish and a director or former director or any connected person of a director or former director".