Thursday 30 October 2014

Small Business Minister John Perry's job on line as court rules he must pay €2.5m

Tim Healy and Fionnan Sheahan

Published 23/07/2013 | 05:00

John Perry: under significant pressure

SMALL Business Minister John Perry has six weeks to find a means of paying a bank almost €2.5m in debts – putting his job at risk.

Mr Perry and his wife Marie have consented to a judgment for €2.47m against them at the Commercial Court over unpaid loans.

Danske Bank issued the loans in October 2011, to be repaid by November 2012, to restructure existing loans and an overdraft account and provide €25,000 towards tax affairs.

The loans were secured by first legal mortgages over property including Perry's Hardware store and the Stone Park restaurant at Main Street, Ballymote, Co Sligo.

Mr Justice Peter Kelly entered judgment for €2.47m but granted the couple a stay to September 2, on its execution and registration.

The judgment places significant financial and political pressure on Mr Perry, but colleagues were supportive of him last night. "There is huge sympathy for him. Six weeks is not a lot of time to come up with alternatives though," a minister told the Irish Independent.

Mr Perry's ministerial status is regarded as dependent upon Taoiseach Enda Kenny's view of the status of his financial affairs. But the junior minister would automatically have to resign as a TD if he was declared bankrupt.

Mr Kenny is believed to have not been fully aware of the extent of Mr Perry's debts and his difficulties in making repayments.

"Kenny wouldn't be aware of anybody's personal business. He doesn't ask about it," another minister said.

The bank claimed, before issuing proceedings for judgment, that it made "extensive endeavours" to reach an accommodation with the couple, including several letters and meetings during 2012 and 2013.

The couple, of Carrownanty, Ballymote, "continually failed, neglected or refused to make payments, provide information, adhere to agreed timeframes or co-operate in any meaningful way" with the bank or its agents, it claimed.

Danske also alleged it complied at all material times with the Code of Conduct for Business Lending to Small and Medium Enterprises.

DIFFICULTIES

In March and October 2012, it issued letters under that code asking if the couple were in financial difficulties and drawing their attention to the information and resources available to them if that was the case.

The bank said it also made clear in November 2012 to John Nolan, the couple's new financial adviser, a response to various matters was required within two weeks. While some repayments were made, total repayments amounted to €57,134, it said.

It also claimed Mr Perry, a Fine Gael TD for Sligo-North Leitrim, cancelled various meetings with it before attending a meeting at Danske's offices at Kildare Street, Dublin, last April 17 when he indicated he was seeking funds from AIB.

Mr Perry also said he knew Richie Boucher of Bank of Ireland and would progress a refinancing proposal with him, Danske said.

On May 23, after Mr Perry said AIB was still considering the matter, Danske said it made clear it would be instructing its solicitors on May 29 to proceed to seek judgment.

Yesterday, counsel for the Perrys told Mr Justice Kelly that while they contradicted some matters in the bank's affidavits, they accepted they had no bona fide defence to judgment and were consenting to judgment for €2,474,346.

The judge entered judgment in that amount but granted the couple a stay to September 2 on its execution and registration.

Their counsel had sought a three-month stay to allow them time to advance restructuring proposals. However, Rossa Fanning, for Danske, opposed a stay of that duration saying there had been ample time and no satisfactory proposals had been made. The judge said he would not grant the three months but would grant a stay to September 2. Given the couple's attitude to the bank's application, he added he would only award costs at the lowest level – €190 – against them.

Earlier, the judge said he had met Mr Perry "for about two minutes" at a reception given after a lecture delivered by the judge and asked the sides whether they had any objection to his dealing with the matter. Both parties indicated no difficulty.

The October 2011 loan facility for some €2.42m was secured by first legal mortgages over a retail premises, the Stone Park Restuarant and Perry's Hardware, all of Main Street, Ballymote, plus first charges over some 50 acres of agricultural lands at Ballymote and Clooncose. Danske said the final repayment date was November 19, 2012.

The bank claimed the couple failed to keep up the interim repayments required under the terms of the facility. No payment was received until a €1,000 payment was made in February 2012 when the balance of the repayments due was about €24,106 and the total repaid was €57,134, it said.

Last March, it demanded immediate payment of the total sum outstanding, with interest, of about €2.47m. Last May, it demanded repayment within seven days and noted interest was still accruing on the sum owed.

Irish Independent

Promoted articles

Read More

Promoted articles

Editors Choice

Also in Business