INDEPENDENT TD Mick Wallace last night admitted he faces financial ruin -- even the loss of his Dail seat -- if banks chase him for personal guarantees.
He warned that the banks had nothing to gain by going after him for the debts run up by his construction company.
But ACC Bank appointed a receiver to take control of some of the most valuable assets owned by his firm M&J Wallace Ltd. The company owes banks €42m in all, according to the most recent accounts filed with the Companies Office. Nearly half of that is owed to ACC.
Now ACC has seized some of his most high-profile development properties in an attempt to recover some of the money it is owed.
Mr Wallace admitted last night that he had given personal guarantees to banks. And he defended the record of his company.
But sources said that even after ACC sells the properties, Mr Wallace will still be in debt. And that means the bank could go after him for the balance of the debt because of his personal guarantees.
Company accounts show that Mick Wallace and fellow director Sasha Wallace shared €289,605 in directors' pay in 2008, even though M&J Wallace suffered a loss of €2.7m that year. Pay for the two directors had nearly doubled in 2008, from €184,141 in 2007.
The 2008 accounts are the latest filed by the company with the Companies Office.
Mr Wallace was in the Dail chamber yesterday for Leaders' Questions, where Taoiseach Enda Kenny was quizzed about the pension levy used by his Government to fund the 'Jobs Initiative'.
Before he went to ground and declined to answer any more questions he said: "I've tried to build well -- we were a very successful company for a long time. We weren't bad, we weren't doing crazy things. We've made money every year for 20 years, employed a lot of people, paid our taxes. But the financial crisis arrived, completely undermined the value of our assets and we're no longer in a great place."
Under the 1992 Electoral Act, a TD has to be disqualified from serving in the Dail if he or she is declared bankrupt.
ACC appointed Declan Taite of Dublin accountants FGS as receiver to take control of some of M&J Wallace's most high-profile assets. ACC has a charge over the assets and the receiver is obliged to notify the public within seven days of being appointed.
Under the receivership Mr Taite's job is to manage and ultimately sell the assets on behalf of the bank.
Last night Mr Wallace said that would be futile as he has no wealth outside his mortgaged assets. "If a bank tries to make me bankrupt it has more to do with "badness" than economics," he told RTE.
Up to now the colourful, TD had never said whether or not he gave personal guarantees to lenders for his company's debt, but company accounts show that his business has been dependent on forbearance from bank lenders for the past three years.
Mr Wallace said previously that since 2008 the company had been collecting rents and passing the cash into the bank..
The company also owes large sums to Bank of Scotland (Ireland), Ulster Bank and AIB.
Earlier this year Mr Wallace said the company's property portfolio would be worth around €20m if it was sold off in the current climate, down from €80m at the height of the boom.
ACC's haul of Wallace properties includes much of the Italian Quarter in Dublin's city centre.
The portfolio also includes the Ferrycarrig Sports Complex in his native Wexford, home to Wallace's Wexford Youths soccer team.