A farmer and former developer has secured court approval for a personal insolvency arrangement (PIA) that will write off more than €5.4 million of debt.
Co Sligo-based Martin O’Connor (54) had debts totalling some €6 million arising from borrowings during the Celtic Tiger years to pursue commercial ventures.
Under the court-backed arrangement, Mr O’Connor will get to keep his three-bed family cottage located in a mountainous area in Fermoyle. His mortgage will be restructured to facilitate him repaying the €104,000 balance over a 16-year period.
He will also retain sheep worth €2,800 and a property, valued at €60,000, which he operates as a car park to supplement his income.
Unsecured creditors, owed more than €5.4 million, will collect 0.01 cents on the euro, sharing a dividend of €636. This compares to nothing under a bankruptcy scenario, the court heard.
Loan servicers Pepper Finance Corporation DAC, owed €3 million, and Cabot Financial Ireland Limited, due €2 million, fall into this category and will be repaid €360 and €235 respectively
Loan servicers Pepper Finance Corporation DAC, owed €3 million, and Cabot Financial Ireland Limited, due €2 million, fall into this category and will be repaid €360 and €235 respectively.
Three-quarters of the €636,000 secured debt will be repaid from funds raised through the sale of various properties, the court heard.
A lump sum of €80,000 will be paid to secured creditor Michael Oates, of Maugherarow, Co Sligo, from the sale proceeds of two properties in Manorhamilton, Co Leitrim, with the remaining €150,000 he is owed treated as unsecured debt.
Mr Oates had objected to the arrangement, but when the case came to court last week, his counsel, David Roberts, said he was operating with “limited instructions” as his solicitor had been unable for some time to reach Mr Oates, who now lives in Australia.
Hearing these circumstances, Mr Justice Alexander Owens had adjourned the matter for a week. On Monday he made orders approving the PIA.
The application, made under section 115A of the Personal Insolvency Act 2012, was presented to the court by barrister Keith Farry, on behalf of personal insolvency practitioner Eugene McDarby, of UHY Insolvency.
In a sworn statement, Mr O’Connor said the arrangement was “crucial” to his personal and family position and to his ability to move on with his life. His engagement with a debt practitioner has provided him with “new light at the end of [a] long, dark tunnel of debt”, he said.