Michael McGrath (Cork South Central, Fianna Fail)
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Question 69: To ask the Minister for Finance his views on whether the work of the National Assets Management Agency is being undermined by developers attempting to avail of bankruptcy in the UK; and if he will make a statement on the matter. [31432/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by NAMA 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 further advises that in its position as a secured creditor it is generally neutral on the locus of bankruptcy proceedings as long as location does not prejudice the Agency's potential recoveries from the bankruptee.

I am also advised by NAMA that the comparatively shorter duration of bankruptcy in the UK is not a consideration for NAMA 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, in the case of the UK beyond the initial one year period. NAMA advises that it is currently challenging the release from bankruptcy in Northern Ireland of one debtor, due to non-cooperation with the bankruptcy trustee.

NAMA advises that its position on the locus of bankruptcy proceedings is partially based on positive on-going engagement with several trustees in bankruptcy of NAMA debtors who have been adjudged bankrupt in the UK. The Agency points out that the bankruptcy regime in the UK is well established, sophisticated and that trustees in bankruptcy 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.

The position of unsecured creditors is fundamentally different. Unsecured creditors, whose claims are subordinate to that of secured creditors, may seek to bolster their position by pursuing bankruptcy proceedings against a debtor. It is worth noting that bankruptcy proceedings are rarely brought by secured creditors and usually in cases of non or lack of full disclosure.