TD Mick Wallace adjudicated bankrupt with debts of €30m
TD Mick Wallace has been adjudicated bankrupt with debts of €30m in the High Court.
The Independents4Change TD ended his fight to avoid bankruptcy after a major debtor would not facilitate him in coming to a personal insolvency arrangement.
The heavily indebted Wexford politician was forced into bankruptcy by vulture fund Cerberus, which filed a petition earlier this year after obtaining a judgment against him for €2m.
The debt arose out of loans issued by Ulster Bank to Mr Wallace’s M&J Wallace construction firm. Cerberus bought the loan book three years ago.
Mr Wallace has been a major critic of the vulture fund’s purchase of Project Eagle, the former Nama Northern Ireland loan book.
Mr Wallace was in High Court today, accompanied by his solicitor Aidan Eames, when the matter came before Ms Justice Caroline Costello.
She was told James Green, a personal insolvency practitioner with McCambridge Duffy, had written to Mr Wallace’s main creditors, AIB, ACC and Cerberus.
The court heard that ACC was “the dominant creditor” and, under personal insolvency laws, would have to give consent to any personal insolvency arrangement proposed by Mr Wallace as his debts with the financial institution were greater that €3m.
However, Mr Wallace’s counsel, Keith Farry BL, said ACC had written back to say it was not willing “to waive the €3m cap”.
This effectively meant Mr Wallace could not proceed with a personal insolvency arrangement.
ACC got a judgment against Mr Wallace for €20m in 2012, but has not sought to enforce it.
Mr Farry said he had considered getting a protective certificate, which blocks creditors from moving against debtors for 70 days.
However, he said this option was not being pursued as there was “no reality” to it.
“From my point of view I cannot put up any further resistance,” he said.
“I cannot see how we can come to a personal insolvency arrangement.”
Eddie Farrelly BL, counsel for Cerberus subsidiary Promontoria (Aran) Ltd, said Mr Wallace’s debts were “in excess of €30m”.
“There is not much prospect of an arrangement,” he said.
A copy of Mr Wallace’s statement of affairs was handed into the court, as well as a letter written by Mr Green.
Having considered the documentation and the submissions from barristers, Ms Justice Costello said she was adjudicating Mr Wallace a bankrupt.
It means that for a period of at least 12 months all of his assets will be in the control of the Official Assignee, Christopher Lehane, who will seek to realise whatever value he can for creditors.
Mr Wallace said afterwards that the proceeding showed the folly of allowing banks have a veto on efforts by debtors to come to an arrangement.