ONE of the county’s most prominent hoteliers, Michael B Lynch, has been declared bankrupt in a UK court with liabilities of more than €50 million. Those owed money have been told that there is “no prospect” of a distribution of funds.
Mr Lynch, a key figure of the Lynch Hotel Group, filed his own petition for bankruptcy, attributing his insolvency to loss of employment due to his companies entering receivership. The bankruptcy order was made against him on October 31 in the Harrogate County Court.
According to creditor report documents from the UK’s Insolvency Services obtained by The Clare Champion, Michael B Lynch of Ballybeg in Ennis resides at and carries out business from an address at Harrogate, North Yorkshire. At the date of making the bankruptcy order, it is outlined that 42-year-old Mr Lynch was living in rented accommodation.
The report by the official receiver states Mr Lynch has liabilities of €52,995,925, with assets of €5,780, including €1,100 in cash held in a building society or bank and €4,680 in jewellery.
Mr Lynch is also the sole proprietor of various leasehold and freehold properties in Ireland, which are all in negative equity. The official receiver in the UK is making enquiries in relation to these properties. Shares have also been sold by Mr Lynch in a former limited company in Ireland and payment of the final 15% is awaited.
The report outlines that Mr Lynch was a director of several companies that collectively ran a hotel chain from the 1990s.
In declaring himself bankrupt, Michael B Lynch stated the companies went through examinership in 2009 and from this point, his income from the companies was significantly reduced. He added that the companies went into receivership in February 2011 and that, as a result, he became unemployed.
An opportunity arose for work in a British hotel chain on a self-employed basis, which he took. “Having sought professional advice about the contingent liabilities, which are inevitably to arise as a result of the receivership of his companies, he filed his own petition for bankruptcy,” the report outlined.
Creditors have been told by the receivers not to complete statutory proof of debt forms as there is “no prospect” of a distribution of funds “either at all or in the immediate future”.
As the bankruptcy order was made in the UK, Mr Lynch could be debt-free within a year compared with 12 years in the Republic of Ireland.
Numerous attempts by The Clare Champion to contact Michael B Lynch were unsuccessful.