Solicitor Michael Lynn may use bankruptcy law to protect himself while he tries to resolve his financial difficulties and repay his debts, estimated at more than €70 million.
The Commercial Court heard yesterday that Mr Lynn, whose legal practice was closed by the Law Society on October 15th amid allegations that he had taken multiple mortgages with several banks on the same properties, may seek the protection of the Bankruptcy Act in an effort to stop judgments being registered against him so he can repay his debts in an "orderly" way.
Two banks, AIB and First Active, secured judgments against Mr Lynn yesterday as the court ordered him to repay them €6.865 million and €5.1 million respectively.
Mr Justice Peter Kelly declined a request by another bank, Bank of Scotland (Ireland), to have the matter adjourned so it could be dealt with in the Law Society's case against Mr Lynn.
The judge said there was a multiplicity of creditors but there was nothing stopping him dealing with motions for judgment. He said that whichever banks were in first could get their judgments first.
His ruling is expected to lead to a flood of applications from banks which are owed money by Mr Lynn.
Another Dublin-based solicitor, Thomas Byrne, whose Walkinstown practice has been closed by the Law Society, appeared for the first time in the High Court yesterday to hear the cases against him. He is being sued by the Law Society and IIB Bank, which is trying to recover €9 million lent to him last month. The bank told the court yesterday that an order freezing his accounts had been too late and that the €9 million, which had been lodged to a National Irish Bank account, was no longer there. The court permitted IIB to seek documents on the NIB account so it can try to trace where its money went.
Mr Byrne owes more than €36 million to at least four financial institutions. The total debts facing both solicitors is expected to exceed €100 million. Some 52 writs have been issued against Mr Lynn.
Bank of Scotland (Ireland) and Permanent TSB will apply to the court on Friday for judgment against Mr Lynn for more than €16 million. At least six other lenders are owed money by Mr Lynn.
In the Law Society's proceedings against Mr Lynn last week, the financial institutions agreed to pool information as there was "an information deficit". However, the institutions were not prevented from seeking further court orders forcing Mr Lynn to repay his bank debts.
Gabriel Gavigan BL, for Mr Lynn, said his client wanted all his creditors dealt with equitably and to avoid a "mad scramble" to obtain judgment against him.
He said a forensic accountant was trying to discover how much Mr Lynn owed and whether he had enough assets to pay off his debts. Mr Lynn is also awaiting a valuation of his overseas properties.
Permanent TSB will apply to the court on Friday for judgment of €10.5 million against Mr Lynn. It is also seeking damages for alleged fraud and negligence.
The bank has also brought proceedings against Fiona McAleenan, a former partner in Mr Lynn's law practice, Capel Law, claiming that it provided loans for more than €10 million issued on the back of personal undertakings provided by her. A legal representative for Ms McAleenan, Betaghstown Wood, Bettystown, Co Meath, has told The Irish Times her client did not sign undertakings.
A statement issued for Mr Byrne by his solicitors yesterday said he deplored the "unworthy, idle, hurtful and irrelevant speculation" about his domestic and private life in some media coverage of his case, including the unfounded assertions that he had absconded.
