Fears that Britain could become a centre for bankruptcy tourism are not new. Almost two years ago, Kent was identified as Europe’s new bankruptcy hotspot, as financially troubled continental Europeans hopped on the Eurostar. Bankrupt German and French citizens proved prepared to travel as they sought relief under UK’s more lenient bankruptcy laws: in Germany it can take up to nine years to be discharged as a bankrupt; in the UK it can be as little as 12 months.
The controversy resurfaced this week (p34) amid fears that embattled Irish developers could start beating that well-trodden path, too. It’s not hard to see why a bankrupt would prefer their petition to be heard in the UK rather than Ireland, where bankruptcy applies for life unless it is discharged by the court.
Cork-based developer John Fleming, whose Fleming Group incurred debts of €1bn, has already declared himself bankrupt in the UK. Others are expected to follow, in a move that is bound to frustrate Ireland’s National Asset Management Agency.
Creditors don’t like it, but there is a reason why the UK’s bankruptcy laws are more lenient. The last government sought to follow the US path where “honest” bankrupts are not punished but instead given a second chance. Rewards for failure, cried critics. An important boost for entrepreneurialism, said ministers.
Whatever the rights or wrongs then, it doesn’t feel right now. That said reform is unlikely to be a legislative priority.
So we can do little but swallow hard and accept the inevitable as more overseas property investors use UK procedures to secure a less constrained future for themselves. Oh, and perhaps wish the lawyers and accountants well who are bound to do well out of this. Like I said, swallow hard
n The first Olympic medal table is out. On the podium are competitors from China, Qatar and Britain. Placings are yet to be determined, but the betting market is expecting gold for Qatar, with China an outside bet. Yes, the shortlist for the Olympic Village is out (see p33).
So Jamie Ritblat’s Delancey (backed by Qatari Diar), Hutchison Whampoa (owned by iconic Hong Kong billionaire Li Ka Shing), and the Wellcome Trust (a medical charity) form the shortlist for the purchase and long-term management of the east London site.
The decision sees six, mainly UK, bidders discounted. The Wellcome Trust is bidding for the whole park, too, somewhat controversially. It shouldn’t be discounted, but most consider it an also-ran. With Hutchison Whampoa better known for ports than flats in UK property circles, it too looks like an outsider. That leaves Qatari/Delancey as the favourite. A final decision is expected in the summer.
n The return of Enterprise Zones has got the industry talking. No-one I’ve spoken to sees them as a panacea, but most see opportunity and many regions are committed to competing to secure tax breaks and other benefits. EG will be following developments closely and this week we’ve put an interactive map online that details some of those opportunities nationally. There are videos, audio and images – and we want you to contribute. Tell us what you want to see added to the map. Take a look at estatesgazette.com/enterprise-zones and e-mail damian.wild@estatesgazette.com.
• High in the thoughts of the industry this week is Gareth Clutton, who is suffering from an aggressive cancer. His children, Anna, Rafe and George, have set up a courageous website which is already rich with messages of support from the very many people he knows so well in the industry. To add yours visit www.caringbridge.org/visit/garethclutton. Our thoughts are with Gareth, his wife Fiona and his family.
