A Federal High Court sitting in Lagos has struck out a  bankruptcy suit filed against a controversial businessman, Dr Wale Babalakin (SAN), for non-compliance with proper procedure. Wale Babalakin

But the Asset Management Corporation of Nigeria (AMCON ), which filed the suit to recover a debt of N10.3Billion from Babalakin, has resolved to re-file the suit.

In an affidavit of truth of statement sworn to by AMCON's  Chief Legal Officer, Mr Ben Daminabo, and filed before the court by Dr Olisa Agbakoba (SAN), the corporation, while urging the court to adjudge   Babalakin  bankrupt, also sought an  order of the court directing that all his assets, interests and holdings are liquidated and the proceeds applied towards offsetting his debt based on his personal guarantee in favour of his company,  Roygate Properties Limited.

It was alleged that AMCON, a government interventionist institution created to efficiently resolve non-performing loan assets of the country's banks, acquired the loan portfolio of Babalakin in the sum of N13,476,897,098.80.

AMCON, in the pursuit of its mandate, acquired from GuarrantyTrust  Bank for valuable consideration Babalakin's outstanding debt which, as at October 20, 2011,  stood at N13.476,897098.80 and had thus become subrogate in the place of the bank for the recovery of the acquired debt.

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

Babalakin, being the Chairman and alter ego of Roygate Properties Limited, 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,AMCON  prayed the court for the following orders:

  "1.An order adjudging 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, intrests 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 one 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 comply  with the conditions set out in the bankruptcy rules for the commencement of this bankruptcy proceedings. He,  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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