James Reilly's nursing home debts are cleared
But as of last week Children Minister's name still not been removed from Stubbs Gazette
Published 12/07/2015 | 02:30
The Minister for Children, Dr James Reilly, has cleared the debt that led to a €1.9m judgement being registered against him, in Stubbs Gazette but his name was still on the debt defaulters' list last week.
Mr Reilly confirmed this weekend that the debt arising from his investment in a Tipperary nursing home has been settled after he and his co-investors sold the property for €2.6m last year, but he was unaware that he was still in Stubbs, according to a spokesman.
Although the €1.9m judgement was lifted, it seemed a formal notice that the debt had been satisfied had not yet reached Stubbs Gazette.
A spokesman for Mr Reilly said the case was settled, the debt has been "satisfied in full" but it was up to the solicitors for the creditors to issue a "notice of satisfaction" so that Dr Reilly's name could be removed from Stubbs Gazette.
Mr Reilly's public embarrassment as a debt defaulter three years ago marked a low point for the Minister at a time when he was grappling with budgets cutbacks and political controversies in the Department Health.
It also drew public attention to his private finances.
The Minister has since decided to sell Loughton House, the Georgian pile in Moneygall, Co Offaly that he and his wife restored over many years. The 18th century property that he and his family acquired in 2002 was put up for sale in May for €2.75m. The property is still on the market.
Another of his businesses, Lusk Property Investments, recorded a trading loss of €3.069 and its liabilities exceeded assets by €9,355. According to the company accounts, Mr Reilly and his wife, Dorothy, have been financially supporting the business.
Mr Reilly was owed €6,158 by the business as of December 2013, according to the accounts.
Mr Reilly was saddled with the nursing home debt after he invested with 12 others in the Tipperary facility.
The difficulties were caused by a clause in the deal that stipulated that five of the original investors - including Mr Reilly and a Fine Gael councillor and friend, Ann Devitt - would buy the others out of the nursing home after 10 years.
However, a rent dispute over the building and the property market crash meant that they were not in a position to do this, and their co-investors sought judgements against the Minister, Ann Devitt and three others.
According to Cllr Devitt, the investors all took a hit on the nursing home. She told the Sunday Independent this weekend: "We have come out of it without recovering our full investment. But at least we don't owe anybody anything."
The High Court previously heard that they put in around £60,000 (€76,000) each, and obtained a £1.5m loan from Bank of Ireland to buy the nursing home. The expectation was that the investors would make €200,000 back after 10 years but the Minister and his co-investors have walked away having lost the bulk of his investment.
Of the €2.6m raised by the sale of the nursing home, around €2.1m was paid out to clear the bank debt and buy out the investors.
Mr Reilly and the others also had to pay the legal costs for the creditors, as well as their own costs. A dispute about rent on the nursing home is still unresolved.
The former Minister for Health has kept a lower profile in the Department of Children and Family Affairs, although he brought with him from health the high profile campaign against tobacco packaging, which he championed in his previous department.