The High Court has rejected objections raised by a vulture fund to a personal insolvency arrangement (PIA) writing off €2m in debts owed by a publican.
A judgment on the matter, delivered by Mr Justice Denis McDonald, is just the latest in a series of large write-offs approved by the court under legislation aimed at allowing debtors to keep their family homes and get a fresh start.
Gary Hyde (51), a publican who has also been involved in boxing promotions, had debts totalling almost €2.85m.
But under the PIA, which the majority of his creditors approved, over two-thirds of this will be written off and he will get a restructured mortgage for his home at Rathcooney, Glanmire, Co Cork.
Some €589,915 was owed on the property to Promontoria Scariff DAC, an Irish affiliate of giant vulture fund Cerberus.
But this debt will now be written down to the market value of €420,000, with repayments to be made on a tracker rate of 0.75pc over 21 years.
Promontoria Scariff's objections to the PIA were the main stumbling block to the debt deal, but these were rejected by Mr Justice McDonald in a judgment delivered yesterday.
Another property worth €425,000 is to be sold by a receiver, according to court filings. Beyond that Mr Hyde will have to contribute a sum of €2,093 to creditors under the arrangement, devised by personal insolvency practitioner Alan McGee.
The debt deal also involved an interlocking application from Mr Hyde's wife Fiona.
Secured creditors will receive a return of 35pc under the PIA, compared to 31pc if Mr Hyde was forced into bankruptcy. Unsecured creditors will get a return of just 0.1pc, but would have got nothing at all if Mr Hyde went bankrupt.
According to court filings, Mr Hyde's main business, the Castle Inn in Glanmire, got into difficulty and he went through expensive but ultimately unsuccessful legal actions which resulted in the appointment of receivers and the sale of the business.
He was unable to service debts on other investments and receivers were appointed to those also.
After losing his livelihood, he fell into mortgage arrears.
Mr Hyde's largest creditor was Everyday Finance, which was owed €1.78m. The next biggest debt was the mortgage debt owed to Promontoria Scariff. He also owed €326,300 to the Revenue Commissioners, €35,400 to GE Capital, €35,000 to Thomas Coughlan Solicitors and €17,100 to Cork City Council.
Promontoria Scariff objected to the PIA, claiming procedural requirements under the Personal Insolvency Act were not complied with.
It was claimed the personal insolvency practitioner had incorrectly classified a judgment mortgage creditor of Mr Hyde, GE Capital, as an unsecured creditor.
This was an issue which would have had a bearing on the vote taken by creditors, in which the PIA was approved.
But the practitioner's counsel, Keith Farry, said GE Capital had not itself chosen to raise any issue over its classification. He also pointed out that the issue being pursued by Promontoria Scariff was not raised in its initial notice of objection.
In a written judgment, Mr Justice McDonald said he had "considerable reservations" as to whether it was open to the vulture fund to pursue the argument.
Ultimately, he found GE Capital was correctly treated by the practitioner as an unsecured creditor for the purpose of the vote.
For a PIA to be approved, it needs to be voted for by creditors with more than 50pc of the value of the secured debts and creditors with more than 50pc of the value of unsecured debts. The judge said both criteria had been fulfilled.