Two women to have debts totalling €1.2m written off after High Court overturns PIA refusal

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22 August 2022

Two women are each in line to have around €1.2m debt to financial fund Promontoria Oyster DAC written off after a High Court judge overturned a Circuit Court refusal to approve Personal Insolvency Arrangements (PIA).

In two separate judgments – unrelated cases –  Mr Justice Mark Sanfey said he was satisfied to reverse refusals by the lower court to approve PIAs for Joan Moran Doyle of Coolroe, Ardattin Carlow and Linda Torpey of Ballinamona, Ballyneal, Carrick-on-Suir, Co Tipperary.

The Circuit Court had refused to approve the applicants PIA’s, which were formulated by Personal Insolvency Practioners (PIP).

Their PIPs, represented by Keith Farry Bl, appealed those decisions to the High Court.

In his judgment regarding Ms Moran Doyle’s application, the judge said she is a woman in her early 60s, who works for a business development company called Carlow-E Learning Direct Ltd, run by her former husband.

Her debts arose after the collapse of her former husband’s engineering business during the recession of 2007-2008, the judge said.

She owed €1.377m on the mortgage on her family home to Promontoria Oyster.

The proposed PIA, formulated by her PIP Eugene McDarby, would see her contribute €41,000 toward her debts over the next 72 months.

It would also see her mortgage being restructured, allowing her to retain her home which is valued at €310,000 and continue to make makes mortgage re-payments over the next 20 years.

Overall, the PIA would allow her to write off roughly €1m of her debts.

Promontoria Oyster DAC objected to her PIA being approved on the grounds including that she would not be able to comply with the proposed terms of the arrangement and that she had failed to disclose her 99pc shareholding in Carlow-E Learning Direct Ltd.

The judge said that he was satisfied to approve the PIA and found that Ms Moran Doyle is reasonably likely to be able to comply with the terms of the arrangement, where the creditors would do better compared to her being declared a bankrupt.

The judge noted she claimed she had transferred 98pc of the company’s shares to her daughter.

While he was “not impressed” with the errors that lead to the situation where Ms Moran Doyle was alleged to have failed to disclose the shareholding, the judge did not think that the failure was “an elaborate scheme” by her to retain her shares.

In the circumstances, the judge added that he did not consider the applicant to be in breach of the disclosure obligations contained in the insolvency laws.

In Ms Torpey’s case, Promontoria Oyster DAC, which was owed more than €300,000 on the mortgage on her family home, worth €120,000, had objected to her PIA being approved.

In his judgement, Mr Justice Sanfey noted she is a part-time employee in her late 40s who got into financial difficulties after her fashion business had failed during the recession.

Her PIP, Mitchell O’Brien, put together a PIA which would have seen her keep her home, and continue to make restructured monthly payments on her mortgage for the next 23 years.

She will also make a contribution of €78 per month for the duration of the 72-month PIA.

A total of around €180,000 of the debts she owed would be written off.

Promontoria’s objections included that she had failed to make any payments to the fund for a period of two years before she obtained a Protective Certificate, which gave her protection from her creditors.

However, the judge said in his decision that he was satisfied to approve Ms Torpey’s PIA. He said she had been proactive in dealing with her debts, on grounds including that it gives her creditors a better outcome than if she were to be adjudicated as bankrupt.

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