Court told businesswoman Newman bankrupt in UK

Thursday 03 March 2016 17.18
Lawyers for AIB said the bank was not proceeding with the cross-examination of Sarah Newman
Lawyers for AIB said the bank was not proceeding with the cross-examination of Sarah Newman

The Commercial Court has heard businesswoman Sarah Newman was recently adjudicated bankrupt in the UK.

Ms Newman was due to be cross-examined in court today as part of AIB Mortgage Bank's efforts to recover a €9m judgment obtained by it in 2011 against her and her former partner, former Kilkenny hurler DJ Carey.

In light of the bankruptcy of Ms Newman, lawyers for the bank said it was not proceeding with the cross-examination.

Lawyers for Ms Newman said the matter was being dealt with on consent.

Counsel also indicated any further court applications would be brought via the UK official receiver's office.

In the circumstances, the judge struck out, on consent of both sides, the motion for cross-examination.

The bank had brought that motion after alleging Ms Newman, a mother of two with an address in London, was not sufficiently engaging with it in relation to meeting her liabilities to it.

Following the sale of properties and some repayments, the bank claims €6.4m remains outstanding.

In its motion, it sought to question Ms Newman about any other debts and whether she has any other property or means of satisfying the judgment obtained.

It also sought orders requiring her to file a statement of affairs, plus any relevant documents, specifying any such debts and any income which could go towards satisfying the judgment.

The application arose after Ms Newman and Mr Carey consented at the Commercial Court in May 2011 to entry of judgment for more than €9m each against them in favour of the bank arising from loans and guarantees of each other's liabilities.

Judgment for €9.5m was entered against Mr Carey arising from an April 2007 €7.85m loan advanced in the context of a wider commercial transaction involving him and associated businesses to refinance existing debt due to Irish Nationwide Building Society and to release equity on properties held by him and Ms Newman.

The €7.85m loan was secured on two properties in Co Kildare and Co Kilkenny. The judgment also arose from Mr Carey's May 2007 guarantee, limited to €1.5m, of the liabilities of Ms Newman.   

The bank said €8m was due from Mr Carey under the mortgage loan account and €1.5m under the guarantee.

Judgment for about €9.4m was granted against Ms Newman arising from her guarantee, limited to €7.85m, of the liabilities of Mr Carey and under a €1.5m mortgage loan secured on a property in Co Kildare.

The court agreed to place a four-week stay on the judgment order in relation to Mr Carey but refused any stay in the case of Ms Newman after noting the bank's concerns about its ability to execute judgment over a property in another jurisdiction, Switzerland.

Ms Newman had been given the opportunity by the bank to make proposals but had given no information, he said.

The bank wrote to Ms Newman on 10 February 2011, warning, unless €7,349 arrears on the mortgage account were paid within 21 days, it would be entitled to terminate the facility.

On March 7 2011, the bank wrote to Ms Newman stating Mr Carey was in breach of his loan obligations and demanding immediate payment of €7,875,000, plus daily interest, under the guarantee provided by her.