Developers have €13m in Celtic Tiger debt written off in High Court rulings

In a separate PIA application also approved by Mr Justice Alexander Owens yesterday, Sligo-based farmer and former developer Martin O’Connor had €5.4m in debt written off.

The cases are the latest indication of the level of unresolved debt which still exists more than a decade on from the crash.

Mr Meely (52), of Kiltoom, Athlone, Co Roscommon, had total debts of €8.2m and is now employed as a maintenance worker at a hotel resort.

He previously operated Bespoke Construction Ltd and was also involved in two other construction and development companies, all of which went into receivership.

His debts included €502,000 owed to Pepper Finance Corporation in respect of his family home, €260,000 of which was mortgage arrears. Under the PIA, he will pay off all his mortgage debt, but the payments have been made more manageable after the term was extended from eight-and-a-half years to 18 years, with a reduced interest rate of 0.5pc.

However, his largest creditor Ulster Bank, which is owed almost €7.7m, will receive a fraction of what it is owed.

Unsecured creditors, such as Ulster Bank, will receive just €15,712 under the debt deal.

The judge also approved an interlocking PIA for Mr Meely’s wife Niamh. The PIAs were devised by personal insolvency practitioner James Green of McCambridge Duffy and were presented to the court by barrister Keith Farry. The applications were unopposed.

In an affidavit, Mr Green said the PIA offered a better return for creditors than bankruptcy.

In a separate, unrelated application, also presented to the court by Mr Farry, farmer and developer Martin O’Connor (54) had €5.4m of his €6m debt pile written off. Unsecured creditors will receive dividends totalling just €636 from
the arrangement.

A court filing said they would have received nothing at all if Mr O’Connor was made bankrupt. His debts related to borrowings during the Celtic Tiger years for commercial ventures.

In an affidavit, Mr O’Connor said he had borrowed heavily, hoping to take advantage of the booming property market at the time. The PIA was devised by personal insolvency practitioner Eugene McDarby of UHY Insolvency.

Under the arrangement, he will save his home in Calry, Co Sligo, with a restructured mortgage allowing him to pay off the €104,000 owed on the property until 2038.

Mr O’Connor’s largest creditors were Pepper Finance Corporation DAC, which was owed €3m, and Cabot Financial Ireland Ltd, which was owned €2m. Both firms were classed as unsecured creditors and will receive dividends of just €360 and €235 respectively.

The debt deal will allow Mr O’Connor to keep sheep valued at €2,800 and a car park, worth €60,000, which provides a source of income.

One secured creditor, Michael Oates, who was owed €230,000 and had objected to the deal, will receive €80,000 from the sale of land in Co Leitrim. The remainder of what was owed is now being treated as an unsecured debt under the PIA, attracting a dividend of just €17. A property in Cloghervagh, Co Sligo, worth €320,000, will be surrendered under the debt deal.

In an affidavit, Mr O’Connor said securing the PIA would “have a huge impact on my life” and would be “crucial to my personal and family position, and my ability to move on”.