Kelly's liquidator runs out of time

The High Court yesterday refused to grant the official liquidator of Kelly's Carpetdrome an extension of time in order to prove to the Official Assignee in Bankruptcy a debt of £1.9 million against Mr Matthew Kelly.

Mr Justice McCracken said the 13-year delay in making the application was inexcusable and prejudiced Mr Kelly in that it would mean he would have to find £900,000 to become discharged from bankruptcy.

Kelly's Carpetdrome Ltd was wound up by High Court order in July 1981. Mr Patrick J. Byrne was appointed official liquidator. He brought proceedings against Eamon and Matthew Kelly.

In July 1983, the High Court held that the business of the company was carried on from October 1976 to February 1980 with intent to defraud creditors. Eamon and Matthew Kelly were held personally liable for the liabilities of the company and should pay £1.9 million.

In January 1984, Mr Matthew Kelly was declared bankrupt. In June 1987, Mr Byrne applied to the court for a number of orders on the basis that the winding-up had been completed. He was then discharged as liquidator.

The Official Assignee in Bankruptcy fixed July 31st, 1997, as the last day in which creditors' proof of debt was to be received by him in the bankruptcy of Matthew Kelly.

Last month, Mr Michael Collins SC, for Mr Tom Grace, official liquidator of Kelly's Carpetdrome, applied for an extension of time to prove the debt. He argued that the liquidator had only recently learnt that Mr Kelly had substantial assets.

Yesterday, Mr Justice McCracken said the liquidator was entitled to make the claim at any time between 1984 and July 31st 1997 and failed to do so. He said the information given to court was "scanty in the extreme" and he was concerned at the circumstances in which the High Court terminated the liquidation in 1987. He said it appeared the liquidator took it upon himself effectively to abandon the claim against Mr Kelly.