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Empire built in boom but banks owed €40m are circling prized properties

THE financial high point for Mick Wallace came in 2007. By that August, his steady-she-goes property development company was sitting on profits of more than €4.1m even after paying out a six-figure annual salary to its boss.

The company's prosperity was built on a property boom that drove profits to more than €370,000 that year, and left M&J Wallace sitting on properties worth almost €23.5m.

Five years on, and the Wexford TD is in an entirely different position as ACC, Ulster Bank, AIB and Bank of Scotland (Ireland) circle his prized assets so they can get back the €40m they're collectively owed.

Mr Wallace's biggest lender ACC has secured a judgment order compelling him to repay €19m -- money he admits he hasn't got.

The bank has also installed an 'asset receiver' to take control of prime buildings and sites that once made M&J Wallace so valuable. Their receiver has put a €3m value on nine commercial units and 11 apartments in Dublin 1's Italian Quarter.

A site with planning permission in Dublin 6 is worth €1m.

None of the assets have been sold yet -- such is the grim state of the property market -- but once they are sold, the money goes to the bank.

M&J Wallace holds other assets too, but the firm has other debts and the banks are circling. AIB has begun selling assets by consent as has Ulster, Bank of Scotland (Ireland)'s plan is less clear.

Mr Wallace's own website stresses that "none" of his loans are in NAMA -- this is because the loans he got from the Irish banks were too small to be transferred over.

Either way, since Mr Wallace has described his company's debts as about €40m and has admitted the company can't pay its way, it seems unlikely that he will ever get a penny from any asset sales.

Mr Wallace's declaration of interests for the Dail shows he also owns another business 'Wallace Calcio', which operates his wine bars.

Many of those wine bars trade from buildings owned by M&J Wallace, but as they have formal leases it has been business as usual since the asset receiver went in.

The hospitality business has filed up-to-date accounts covering the year to last August, but they don't make for pretty reading.

Wallace Calcio owed €156,000 more than it owned in August 2011, having lost €55,000 in its most recent year.

The company paid rent of €234,708 to M&J Wallace that year.

The Dail entry also lists two other companies that Mr Wallace is involved in -- Savage Streetware Ltd and Wallace Imago Ltd. Both are described as clothes firms.

The two companies are tiny -- Savage Streetware's latest accounts show it was €31,000 in the red in August 2011, while Imago was €15,000 in the red when it last filed accounts in August 2010.

Wallace stepped down as a director of both companies in June 2011 in favour of his son, Fionn.

When he joined the Dail, Mr Wallace listed a three-bed house in Youngstown, Taghmon, Co Wexford, and a three-bed house in Castlehaven, Danescastle, Bannow, Co Wexford. Both are described as "rented".

Irish Independent