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€32m debts written off by court in three days

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The Four Courts. Stock picture

The Four Courts. Stock picture

The Four Courts. Stock picture

More than €32m in personal debt has been written off this week under insolvency arrangements approved by the High Court.

The huge sum relates to six cases dealt with between Monday and Wednesday.

The largest write-off - €15.2m - came with the approval of a personal insolvency arrangement for former Pierse Construction director Michael O'Reilly.

The company was one of the country's largest building firms before going into examinership and then liquidation after the property market crashed a decade ago.

This week's cases highlight the increasing use of legislation introduced in 2013 aimed at allowing insolvent debtors keep their family homes and get protection from creditors.

Already this year there was a record €60m debt write-off approved for Enda Patrick Whelan, an Ennis-based former quarry operator.

The arrangement for Mr O'Reilly, of Newtown, Celbridge, Co Kildare, continues the trend of multi-million euro write-offs.

It was devised by personal insolvency practitioner Alan McGee and approved on Monday by Mr Justice Mark Sanfey.

The court heard Mr O'Reilly invested heavily in Pierse Construction and other property ventures. But all of the investments were lost in the recession and he ended up with debts of €15.8m.

Mr O'Reilly's largest creditors were Everyday Finance DAC, which was owed more than €8.9m, and Danske Bank, which was owed €4.8m.

Unlike other recent arrangements, Mr O'Reilly will no longer own his family home.

He found a third party to purchase it at market value and then rent it back to him and his wife Fionnuala. It was one of three properties now worth a combined €690,000, on which €2m in mortgage debt was outstanding. All have been voluntarily sold.

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A feature of some of the cases this week was the poor return vulture funds recouped on bad debts.

In one case dealt with yesterday, Ennis Property Management, a vulture fund affiliate of global investment bank Goldman Sachs, will get just €182 from two sisters-in-law who had total debts of €8m.

The case involved the approval of arrangements for Una and Margaret Kinsella, both from Ballybritt, Roscrea, Co Tipperary.

Una Kinsella had debts of approximately €3.8m, while Margaret Kinsella owed around €4.2m. The vast majority of these debts have now been written off.

They will also keep their family homes under restructured mortgages.

Each will have to make a lump sum payment of just €100 towards their debts.

The debts arose from personal guarantees for loans used to fund a business run by their husbands.

The arrangements were also put together by Mr McGee.

His barrister Keith Farry told the court the arrangements were more advantageous to creditors than if the debtors were made bankrupt.


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