Fraud case developer challenges appointment of bankruptcy trustee

A former millionaire real estate developer facing fraud charges seeks to challenge the appointment of a forensic accountant as bankruptcy trustee.

Hilip Marley (49) alleges that the appointment, made at the request of a creditor, was “rogue” and “invalid”.

He filed the complaints in the High Court with Judge Richard Humphreys, the judge who approved the appointment of accountant Mícheál Leydon last March.

Mr. Marley, a businessman, became a multimillionaire at the age of 33 when he listed his student housing company, Ely Property Group, on the AIM London Stock Exchange in 2005.

He also had a relationship with reality TV star Dana Wilkey from The Real Housewives of Beverly Hills.

However, the Dubliner’s business empire collapsed, with Ely being liquidated in 2013. He was declared bankrupt in 2019 with debts of 6.6 million euros after an unsuccessful attempt to secure a deal. personal insolvency.

The petition was filed by UK private equity firm Maven Capital Partners LLP, to which Mr Marley owes just over € 1 million.

Earlier this year he was accused of stealing and laundering € 260,000 in connection with land registration fraud. He denies the charges.

Although now released from bankruptcy, the creditors are still suing Mr. Marley’s pre-bankruptcy assets.

Normally, bankruptcy assets are administered by the official assignee, an independent agent based in the insolvency department.

However, following a proposal from Maven, the creditors voted to install Mr. Leydon as the bankruptcy trustee, instead of the official assignee, under a little used section of the bankruptcy law.

While the reasons for this decision have not been set out in court, such appointments tend to be made in more difficult bankruptcies where a greater degree of specialization is required to trace assets.

Three-fifths of creditors in number and value must vote in favor before a bankruptcy trustee can be installed.

Mr Marley alleges that the creditors’ meeting was flawed because the vote of Permanent TSB, a creditor opposed to the appointment, was not counted.

Last March, Judge Humphreys suspended Mr Leydon’s appointment for six weeks to allow the permanent TSB to oppose. However, she did not intervene and Mr. Leydon then began his work.

Mr Marley applied to the Court of Appeal, which referred the matter to Judge Humphreys. On Monday in the High Court, Mr Marley claimed that the permanent TSB had not intervened because he “was denied knowing that his vote had not been counted”.

“I think what happened here will become very clear to you,” he told the judge. “It was a bankruptcy hijacking by an aggrieved creditor that bankrupted me in the first place.”

Niall Ó hUiginn, counsel to Maven, called the language used by Mr Marley “inflammatory”. “My client denies all of this,” he said.

Mr Ó hUiginn told the judge that Mr Marley did not have standing to challenge Mr Leydon’s appointment.

“It is the prerogative of creditors to appoint a trustee in bankruptcy, just as it is the prerogative of creditors in liquidation to appoint their own liquidator,” he said.

However, Mr. Marley argued that he had standing.

Judge Humphreys adjourned the case later this month, when he considers whether, and to what extent, Mr Leydon can continue his work pending the outcome of Mr Marley’s challenge.

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