Developers have €13m in Celtic Tiger loans written into High Court rulings

The High Court has written off more than €13m of debt owed by two Celtic Tiger-era property developers.

Based in Onan Meili, Co Roscommon, whose construction and development business went into receivership following the financial crash in the late 2000s, under the terms of a personal insolvency arrangement (PIA) approved by the court to settle a loan of €7.7m was written off.

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

The cases are the latest indication of the level of unresolved debt that still exists more than a decade after the crash.

Mr. Meili (52) of Kiltoom, Athlon, 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 Limited and was also involved in two other construction and development companies, all of which went into receivership.

He owed €502,000 in debt to Pepper Finance Corporation in respect of his family’s home, of which €260,000 was owed as a mortgage. Under the PIA, he would pay off all his mortgage debt, but the payments have been made more manageable as the term has been increased from eight-and-a-half years to 18 years, with a lower interest rate of 0.5 percent.

However, its biggest creditor Ulster Bank, which is owed around €7.7m, will receive a fraction of what it owes.

Unsecured creditors, such as Ulster Bank, would receive only €15,712 under the loan deal.

The judge also approved an interlocking PIA for Mr. Meili’s wife, Niam. The PIA was prepared by McCambridge Duffy’s personal bankruptcy practitioner James Green and presented in court by barrister Keith Fairey. The applications were uncontested.

In an affidavit, Mr Green said PIA offered better returns for creditors than bankruptcy.

In a separate, unrelated application, submitted to court by Mr Fairey, farmer and developer Martin O’Connor (54) had €5.4m written off his €6m loan pile. Unsecured creditors would only receive a total dividend of €636
Arrangement

A court filing said that if Mr. O’Connor had been made bankrupt, he would have received nothing. His loans related to lending during the Celtic Tiger years to commercial enterprises.

In an affidavit, Mr O’Connor said he had borrowed heavily in hopes of taking advantage of the booming property market at the time. The PIA was prepared by Eugene McDarby, a personal insolvency practitioner at UHY Insolvency.

Under the arrangement, he will save Calari, his home in Sligo with a restructured mortgage, which will allow him to pay off the €104,000 he owed on the property by 2038.

Mr O’Connor’s biggest creditors were Pepper Finance Corporation DAC, which owed €3m, and Cabot Financial Ireland Limited, which owned €2m. Both firms were classified as unsecured creditors and would receive dividends of €360 and €235, respectively.

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

A secured creditor, Michael Oates, who owed €230,000 and objected to the deal, would receive €80,000 from the sale of the land in Leitrim. What was outstanding is now treated as an unsecured loan under the PIA, attracting a dividend of just €17. A property in Clogherwagh, Co Sligo, valued at €320,000, will be surrendered under the loan deal.

In an affidavit, Mr O’Connor said achieving PIA would “have a huge impact on my life” and would be “significant to my personal and family situation and my ability to move forward”.