Fleming to emerge from bankruptcy
Next moves by West Cork developer will be
eagerly awaited - both locally and nationally
JOHN Fleming, the Butlerstown developer whose construction empire collapsed last year after amassing debts of over €1 billion, is due to come out of bankruptcy in the UK next week.
Mr Fleming was declared bankrupt shortly after he moved to Essex in England last year. In England, bankrupts are discharged from their debts within 12 months, meaning that he will be due to emerge from bankruptcy on November 10th. That's in stark contrast to Ireland, where bankruptcy restrictions remain in place for 12 years.
European Union law allows people to have their bankruptcy dealt with in any member state, subject to certain conditions. English bankruptcy legislation allows people to petition for bankruptcy assuming they have had 'residential or business connections' in England or Wales in the previous three years.
Formerly resident at Seven Heads, Butlerstown, Mr Fleming and his wife, Noreen, moved to England in February, 2010. The move was prompted by his wish to 'find employment using the skills and experience I had gained at the Fleming Group', according to the bankruptcy documents. He found work with the Crowley Young firm.
The Flemings were obliged to provide complete information on their finances to the receiver. They were also prevented from using bank accounts or credit cards and could not receive credit of more than £500 from anyone without disclosing their bankruptcy status. No payment to their creditors was allowed.
Bankruptcy documents reveal that John Fleming will be allowed to retain pensions held with Irish Life which are due to mature in 2021, when Mr Fleming is 70. The funds had values of €117,239 and €410,058 in July 2010.
In Britain, a pension is not included in the estate divided up by courts. In Ireland, this is not the case.
The Flemings were also allowed to retain 'miscellaneous personal assets to a total value of approximately €49,100.' These included two cars with an aggregate value of €25,000 as well as approximately €20,000 in a current account that was used to discharge everyday living expenses. They were allowed to retain another €50,000 to cover the costs of implementing the terms of settlement.
The documents also reveal that Mr Fleming transferred 'various properties and cash' into a family trust, the Seven Heads trust, in May 2009. The properties in the trust included a house in Meadowlands, Courtmacsherry; a house in Bishopstown, interest in three apartments in Inchydoney Island, an apartment in Limerick and two apartments in Ashbrook Apartments in Dennehy's Cross, Cork.
The properties or their net sales proceeds were transferred to the liquidator as part of the overall settlement. The transfer was made by the trustees, Patrick and Denis Fleming, who secured consent for the transfer from the original beneficaries of the trust. These included Noreen Fleming and the couple's daughters, Tracy Fleming-Hand, Linda Fleming, Claire Fleming, Elaine Fleming and Michelle Fleming.
There have been fears that other developers might follow Mr Fleming's example and declare bankruptcy in the UK. Earlier this year, in an article entitled 'Ireland turns to bankruptcy tourism,' The Guardian said it is 'fairly easy for
from page one
applicants to satisfy a court that their "centre of main interests" has permanently transferred to the UK, even after moving to a British address for a few weeks.'
Just 29 people were made bankrupt in Ireland last year, compared to 79,000 in Britain and 1,321 in Northern Ireland. A record number of personal insolvencies - 752 - were recorded in Northern Ireland in the second quarter of this year. Namawinelake, an internet blog that attracts a wide following among finance professionals, estimates that the bankruptcy rate in Northern Ireland is approximately 500 times that of the Republic's per 100,000 population.
A rapid fall
John Fleming's fall from grace was a rapid one. In 2008, The Sunday Times Rich List estimated that he had a net worth of €138 million, making him the 75th wealthiest person in the country. His companies had an annual turnover of more than €200 million, and directly or indirectly employed in the region of 2,000 people.
It all started way back in the mid-1970s. The son of a fisherman from Seven Heads, Mr Fleming began building outhouses and sheds for local farmers. A strong reputation for quality saw the firm grow and, within a decade, it had secured public contracts such as for Leap National School and Skibbereen Water Scheme.
He was one of the contractors involved in the building of the Glanmire by-pass in the late 1980s. This was one of the largest road-building projects in Ireland at the time.
The building contracting firm gradually moved into development, buying land and building retail and industrial parks as well as hotels. The West Cork Technology Park in Clonakilty was a flagship development locally, providing hundreds of jobs for the area.
It bought and developed the five-star Fota Island Resort as well as the Inchydoney Island Lodge and Spa, which was later sold on to its current owner, Bandon man Des O'Dowd. At the peak of the boom, Mr Fleming paid €165 million for a 7.7 acre site in Dublin, where planning permission for 880 apartments was secured.
While developers have been the subject of much opprobrium in Ireland, John Fleming has long been a popular and respected figure in West Cork. Not a flash man and a non-drinker, he received a medal in 2007 for his many years of volunteering with the Courtmacsherry Lifeboat. He was also famously loyal to his local workforce.
However, as the property crash accelerated, his construction empire collapsed. The group was left with total debts of more than €1 billion, much of it to now State-owned Irish banks. Mr Fleming had given a number of personal guarantees to banks - a practice common among Irish developers - in order to obtain the loans necessary to fund his developments.
Now due to emerge from bankruptcy, his next moves will be eagerly watched, both locally and nationally.
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