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Bankruptcy - Extension of period of bankruptcy - S. 85 of the Bankruptcy Act, 1988 as amended - Failure to cooperate with the official assignee - Prejudice to creditor

Posted 1/12/2016

Lehane, Christopher D (official assignee) v Farrell, Angela
14/11/2016 No. 2594 [2016] IEHC 637

Facts: The applicant/official assignee sought an order extending the period of bankruptcy of the respondent by five years under s. 85A(1) of the Bankruptcy Act, 1988. The applicant sought the said order on ground of failure of the respondent to cooperate with the applicant in realisation of assets of the respondent or non-disclosure of income or assets, which could be realised for the benefits of the creditors of the respondent. The respondent alleged that the order adjudicating the respondent as a bankrupt was a nullity and that the applicant had no title over her assets. 
Held: Ms. Justice Costello extended the period of bankruptcy of the respondent for four years from the date when the respondent otherwise would have been discharged automatically from bankruptcy by the operation of law. The Court held that there was ample evidence to establish that the respondent had failed to cooperate with the applicant or disclose assets to the applicant in breach of her statutory obligations. The Court held that any extension of bankruptcy period should be proportionate to the established wrongdoing. The Court observed that non-cooperation and wrongdoing was severe but not to the extent of causing great prejudice to the creditors in the realisation of the respondent’s assets. The Court held that in the circumstances of the case, it would be appropriate to extend the duration of bankruptcy of the respondent to four years. 

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