Big banks refused to cut me a deal, says bankrupt TD
Politician Mick Wallace says he was forced into bankruptcy after major creditors refused to allow him do a deal on his debts.
The bankruptcy will not affect Mr Wallace's seat as the law disqualifying a bankrupt person from being a member of the Dáil was abolished in 2014.
But it means that control of his assets is now in the hands of Official Assignee, Christopher Lehane, who will seek to realise whatever value he can for creditors. Mr Wallace, who owes more than €30m, said neither AIB nor ACC would agree to the drawing up of a personal insolvency arrangement, which would have allowed him to restructure and possibly write off some of his debt. Both financial institutions were approached by a personal insolvency adviser acting on the Wexford TD's behalf after a third creditor, vulture fund Cerberus, petitioned the High Court to have him adjudicated a bankrupt last month.
He required their support if he was to stand any chance of staving off the bankruptcy application.
"Neither ACC nor AIB were interested in facilitating me," he told the Irish Independent.
Mr Wallace said the veto enjoyed by the banks meant personal insolvency legislation was "pointless" for people in his situation. He was speaking after being adjudicated bankrupt by Ms Justice Caroline Costello following a brief hearing at the High Court yesterday.
The application from Cerberus subsidiary Promontoria (Aran) Ltd was made after the fund secured a €2m judgment against the Independents 4 Change TD.
The debt arose out of loans issued by Ulster Bank to Mr Wallace's M&J Wallace construction firm. Cerberus bought the loan book two 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. The fund has declined to comment on claims by Mr Wallace that the application to bankrupt him was made to "settle a score".
Mr Wallace was accompanied by his solicitor Aidan Eames for the short hearing. His counsel, Keith Farry BL told the court James Green, a personal insolvency practitioner, had written to Mr Wallace's main creditors, AIB, ACC and Cerberus.
He said ACC was "the dominant creditor" and, under personal insolvency laws, would have to give consent to any personal insolvency arrangement as Mr Wallace's debts with the financial institution were greater that €3m.
ACC got a judgment against Mr Wallace for €20m in 2012, but has not sought to enforce it.
Mr Farry 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.
"From my point of view I cannot put up any further resistance," said Mr Farry. "I cannot see how we can come to a personal insolvency arrangement."
Eddie Farrelly BL, counsel for Promontoria (Aran) Ltd, said Mr Wallace's debts were "in excess of €30m".
"There is not much prospect of an arrangement," he said.