The High Court has approved a Personal Insolvency Agreement (PIA) allowing a Co Wicklow-based construction manager to write off almost £3m of debt.
The PIA has been requested in respect of Ciaran O’Neill who, upon hearing the court, will contribute €163,000 over the six-year term of the arrangement.
His creditors include two related financial funds, Promontoria Aran and Promontoria Scariff DAC, which acquired loans on which Mr O’Neill had given personal guarantees.
Once interest is included, the fund claims Mr O’Neill owed them more than €2million.
Other creditors included AIB and AIB Mortgage Bank, which owed approximately €490,000; Bank of Ireland, owed €61,000; and the Revenue Commissioners, owed €180,000.
He owed dozens of trade creditors, companies and suppliers involved in the building, sums ranging from €15,000 to just under €2,000.
The PIA, under which Mr O’Neill retains his family home in Rockville, Killegar, Ballybetagh Road, Enniskerry, Co Wicklow, was approved by Judge Mark Sanfey on Monday.
The court heard from Mr O’Neill, a 59-year-old married man who had worked in the construction industry for many years.
In 2000 he set up his own business, Kyneill Construction Ltd, which was successfully marketed. Loans, some of which were eventually assigned to Promontoria, were taken out to acquire property, on which he gave personal guarantees.
Mr O’Neill struggled in 2008 when the recession hit.
The court was told that he had done his best to deal with and repay his creditors, but had been unable to meet his repayment commitments. His business was dissolved and he sought to enter into a personal insolvency agreement.
In a sworn statement, Mr O’Neill’s personal insolvency practitioner, Judy Mooney, said that under the scheme her client’s creditors would do better than if he were declared bankrupt.
Ms Mooney said the outcome under the PIA, as compared to bankruptcy, was the same for Mr O’Neill’s creditors.
However, under the PIA, unsecured creditors would receive 2 euro cents, whereas in a bankruptcy scenario they would only get 1 euro cent.
Keith Farry BL, for Ms Mooney, said Mr O’Neill, who now works as a construction manager for a construction company, has ‘six painful years ahead of him’.
Under the PIA, he will make monthly payments of between €685 and €1,025 over the next 72 months. The PIA will also be financed by the proceeds from the sale of the investment properties held by Mr. O’Neill, and by the collection of the savings and pensions which he had subscribed.
There were no objections to the request for approval of the arrangement, although a number of creditors voted against the PIP proposals, the lawyer added.