The High Court has approved a Personal Insolvency Arrangement (PIA) for a retired businessman who has liabilities of €10m.
In what is believed to be the first approval of an arrangement under the 2012 Personal Insolvency Act, Ms Justice Marie Baker sanctioned a PIA in which creditors of Tony McAuliffe will get about one cent for each euro they are owed.
Mr McAuliffe (71), Strawhall, French Furze Road, Kildare, Co Kildare, has a liability of €10m, most of which was unsecured debt, the judge noted.
She said a meeting of Mr McAuliffe’s creditors was arranged last December but it appeared no creditor appeared with the effect there were no votes for or against the PIA.
As a result, the provisions of Section 108 of the 2012 Act meant the proposed arrangement was deemed to have been approved.
Mr McAuliffe's creditors include Investec Bank, owed €8.56m after the bank obtained a judgment in the Commercial Court against him in 2008 over failure to repay monies loaned to buy land in Co Offaly. Kildare Credit Union, owed €163,000, is another creditor.
The judge noted Mr McAuliffe has some €3,000 available to pay off creditors and a member of his family had also loaned €100,000 towards paying off creditors.
Mr McAuliffe’s monthly income, from his pension, is approximately €1,000 and he is in a position to contribute €314 per month to his creditors, the court noted. There was also the €100,000 loan.
While this meant creditors will receive a dividend of approximately one cent in the euro it was “higher than the dividend” they would get if Mr McAuliffe was adjudicated bankrupt, the judge said.
The costs in bankruptcy are higher than the costs of personal insolvency, which are fixed under the 2012 legislation, she also noted.