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Lagos Businessman Wale Babalakin's Bankruptcy Suit: AMCON Goes on Appeal

There is no reprieve yet for a Lagos Businessman/Lawyer, Dr. Bolanle Olawale Babalakin SAN, as Asset Management Corporation of Nigeria (AMCON), has filed a notice of appeal against the ruling of a federal High Court delivered of April 18, 2016, striking out Bankruptcy suit filed against him.

In a three grounds of notice of appeal filed by law firm of Anachebe & Anechebe AMCON contended that the lower court erred in law when it struck out the bankruptcy petition as premature, notwithstanding, the debt settlement agreement executed by the two parties during pendency of debt recovery suit, which Babalakin and his companies failed to honour.
   The decision of the  lower court striking out the bankruptcy petition without hearing same was hasty and erroneous haven been premised on only one out of numerous grounds stipulated by the bankruptcy Act.

AMCON had executed ample loan and guarantee instruments with Babalakin and his private companies, which processes would have been offered at the hearing of the petition filed against him. However, the lower court denied AMCON to present her case by the hasty decision to strike out the petition for non fulfillment of factual pre-conditions often requires of counsel, any perceived sin of a counsel cannot rightly be visited on the litigant.
        Babalakin haven not controverted his indebtedness to AMCON, directly and through his privately owned companies, cannot hastily be shielded from offering a substantive answer to the AMCON's petition.

AMCON stated further that the proceedings and the decision of the lower court was borne out of technicality at the expense of fair hearing and Justice. Section 1(a)(b) of the bankruptcy Act which the trial judge considered provide only but some instances when a debtor would have been taken to have committed bankruptcy Act, they are not exhaustive of the ground of sections 1(a) and (b) of the bankruptcy Act which provided for when a creditor has obtained final judgement or order against the debtor.

Rule 18 of the Bankruptcy rules which the trial judge relied so heavily on relates to instances where final judgement or order have been obtained by the creditor against the debtor.

Other than obtainance of the final judgement or order against the debtor many other instances exist in the bankruptcy Act when the debtor would have been taken to have committed a bankruptcy Act.

Consequently, AMCON bankruptcy petition at the Federal High Court, was not on the ground that it has obtained final judgement against Babalakin, by virtue of Section 4(1)(b) of the bankruptcy Act, the debt owned by Babalakin and his companies comprised in the debt settlement agreement executed by the parties, is a liquidated sum  which Babalakin has suspended of in the  context of Section 1(d) of the same Act.

It would be recalled that a federal high court sitting in Lagos south-west Nigeria on 18th of April, 2016 struck out Bankruptcy suit filed against a Dr Bolanle Olawale Babalakin SAN, for noncompliance with proper procedure.

    However, Asset management Corporation of Nigeria AMCON who filed the suit in order to recover a debt of N10.3Billion from Babalakin has resolved to re-filed the suit,but opted for the option of appeal filed

     In an affidavit of truth of statement sworn to by chief Legal officer of AMCON, Mr. Ben Daminabo and filed before the court by a Human right lawyer Dr Olisa Agbakoba, OON, SAN, the corporation while urging the court to adjudge Dr. Bolanle Olawale  Babalakin SAN bankrupt was also seeking the order of the court directing that all his assets, interest and holding be liquidated and the proceeds applied towards offsetting his debt in the sum of N10.300,000,000. based on his personal Guarantee in favour of his company Roygate Properties Limited.

    It was alleged that asset Management Corporation of Nigeria is a Government intervention institution created by statute for the purpose of efficiently resolving non-performing loan assets of Banks in Nigeria acquired the loan portfolio of Dr Babalakin in the sum of N13,476,897,098.80.

     AMCON by virtue of and in the pursuit of its mandate acquired from Guarranty Trust  bank for valuable consideration, the outstanding debt of Dr Babalakin which as at October20,2011 stood at N13.476,897098.80 and has thus become subrogate in the place of the bank for the recovery of the acquire debt.

      AMCON as the petitioner issued demands letters duly acknowledged by the defendant to pay the debt, but rather than pay his admitted debt or submit a further proposal to pay the defendant resorted to institute frivolous court action to prevent and frustrate the petitioner from recovering the debt.

    Babalakin was alleged at all times material to this Petition as he is the Chairman and alter ego of Roygate Properties Limited and executed a personal guarantee in the sum of N10.3Billion on behalf of the loan granted the company

   The defendant is also alleged to be indebted to many banks and a large number of his assets have been pledged to these banks as security for the loans.

    Consequently, the Petitioner thus prays the court for the following orders:

  1. An order adjudging the defendant, Dr Bolanle Olawale Babalakin SAN bankrupt.

   2. An order directing that all Assets, Interests, and holdings of the said Dr Bolanle BaBalakin SAN either held personally or through third parties and privies be liquidated and all the proceeds applied towards offsetting the defendants debts in the sum of N10.3billion

   3. An order divesting the respondent Dr.Bolanle Olawale Babalakin SAN of all shares, interests and holding in all public and private companies.

      4. An order of perpetual injunction restraining Dr. Bolanle Olawale Babalakin, SAN appointment as a Director in any public or private Company in Nigeria.

However, in an affidavit in support of preliminary objection   sworn to by on Ebele Oliko and filed before the court, the deponent averred that there is a pending suit before the court in respect of the debt, therefore the petitioner did not complied with the conditions set out in the Bankruptcy rules for the commencement of this Bankruptcy proceedings, therefore urged the court to strike out the suit, but the petitioner in a counter affidavit sworn to by a legal practitioner Malechi Okafor, the deponent averred that, Babalakin's preliminary objection was a ploy to frustrate the debt recovery suit.

Justice Olatoregun Ishola in her ruling stated that there must be a judgement or an order before the commencement of bankruptcy proceedings. She added that the certified true copy (CTC) of the judgement or order is expected to be attached to the bankruptcy motion by the creditor. However, the judge held that the petitioner has failed to comply with the laid down procedures in filing the proceedings. The motion filed in the case was declared invalid and the entire proceedings filed by the petitioner was struck out.

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