Is the UK becoming a Brothel for Irish Bankruptcy Tourism?

While bankrupts in the UK face only one year in financial purdah, in Ireland it is 12 years – despite promises of reform from the Dublin government.

This has led to a number of Irish Business' entering the UK and changing their Centre of Main Interest (“COMI”).

Two recent cases cast different dispersions about the ability to change a person COMI

The first case was an Irish couple who built up a €1bn (£800m) portfolio of luxury property, stretching from London to Washington DC and Stockholm, will attempt to file for bankruptcy in London on Thursday.

Brian O'Donnell, a high-profile Dublin corporate lawyer, and his psychiatrist wife, Mary Patricia O'Donnell, are accused of being among the Irish "bankruptcy tourists" fleeing to the UK to use Britain's more lenient bankruptcy laws. Mr McFeely’s Coalport company built the Priory Hall apartments in Dublin, and the O’Donnells are being pursued by Bank of Ireland for €75 million in unpaid loans related mainly to property investments. Both claim their main centre of business activity is Britain where the bankruptcy laws are different to those in Ireland. The High Court has currently adjourned the hearing and it is not certain where COMI lies.

Another case involved Mr Quinn, a well known Irish businessman who originally was declared bankrupt in the UK on presentation of his own petition. He contested that he had switched his COMI to the UK. The Irish Banks were not happy that he had declared bankruptcy in the UK and sought to seek an annulment. This was based on the fact that he had not disclosed various tax and other disclosures when going bankrupt. The Bankruptcy was annulled in the UK and a few days later he was declared bankrupt in Dublin.