Former billionaire Tony O'Reilly has been declared bankrupt in the Bahamas.
In a case held in the Supreme Court in Nassau the businessman was given clearance to enter the insolvency process.
A receiver over Mr O'Reilly's assets will remain in place.
Justice Milton Evans presided over proceedings where counsel appeared for five creditors including AIB and ACC.
The judge said "I'm prepared and I do" make an order to adjudge Tony O'Reilly bankrupt. He said he gave "liberty" to interested persons to make post-bankruptcy applications.
Prior to the ruling, Justice Evans had heard the arguments of Sophia Rolle, one of three lawyers representing the AIB.
She asked the judge to strike out the original petitions of Tony O'Reilly on the basis that the proceedings were not properly placed before the court and lack of inherent jurisdiction.
However, John Delany counsel representing the Irish businessman said the guidelines were followed to the 'T' except from registering his client's motion which was due to disputes with AIB.
The court ruling means Tony O'Reilly will now be able to file for insolvency in the Bahamas where he is tax resident.
It is expected to lead to Tony O'Reilly's remaining assets to be sold to repay creditors.
It is a setback for AIB which has opposed the businessman entering insolvency which protects him from further actions against him by banks.
It is not yet clear if the bank can fight the judgement in the Bahamas. A full detailed written judgement is expected next week.
