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High Court approves deal to allow Offaly man write off debts of €300,000

The High Court has approved a Personal Insolvency Arrangement (PiA) allowing a 51 year old man write off of debts of almost €300,000.

In a lengthy and detailed judgement Mr Justice Denis McDonald said that he was satisfied to dismiss an appeal brought against the Circuit Court's decision to approve a PIA for Mr Mark Fay of Puttaghaun, Tullamore, Co Offaly.

Mr Fay, who works as an upholster and an agent for an insurance company, had debts of over €547,000 after his business got in difficulty due to competition from other stores and the 2007-09 financial crisis.

The bulk of his debts were owed to financial institutions, including Pepper Finance and AIB. He also owed smaller amounts to a supplier when he had formerly operated his shop, and to Revenue.

The terms of his PIA include that he retains retain his home, which is valued at €200,000, and that his creditors do better than if he was adjudicated a bankrupt.

Under the terms of his PIA his secured debt of €482,000 owed to Pepper Finance Corporation Ireland DAC in respect of his property, will be written down to €210,000 which he will continue to pay off.

The remainder of what he owes to Pepper will be written down and treated as unsecured debt. Other unsecured creditors, will receive a dividend of 2 cent in the euro, compared to nil if Mr Fay was bankrupted.

Pepper which acquired Mr Fay's debt from ACC Loan Management, had appealed the Circuit Court's decision to approve Mr Fay's PIA.

Its appeal was brought on several grounds including that the property over which it held a mortgage was not a principal private residence as defined in the 2012 Insolvency Acts and that a majority of unsecured creditors had voted against the arrangement.

Mr Fay, represented in court by Keith Farry Bl, had argued that the PIA should remain undisturbed and the appeal should be dismissed.

In his judgement Mr Justice McDonald said he was satisfied to dismiss the appeal and approve Mr Fay's PIA.

The Judge also said he was making a wasted costs order against solicitors that had acted for Mr Fay's Personal Insolvency Practioner.

This was because there had been a manifest failure by the firm, Ashtown Gate Solicitors, in relation to its handling of evidence in the case, including an affidavit sworn by Mr Fay and accompanying exhibits in 2018.

The firm, which accepted that such an costs order should be made against it, admitted its shortcomings in this, and several other insolvency cases, it had handled.

It told the court that following a full review it had taken steps to ensure there would be no repeat of what had happened, and had told it staff specific instructions and had warned that disciplinary action would be taken if this were to occur again.

The Judge said that while taking into account the gravity of the failing, once the matter had been raised by the court the principal of Ashtown Gate Mr Bill Holohan had acted entirely properly and undertook a comprehensive review of his firm's records.

The judge said the solicitor was "entirely frank with the court and accepted his own failings in not having an appropriate level of supervision over the personnel dealing with the swearing of affidavits."

"It is clear that he has now taken steps to ensure that failings of this kind will not recur in the future," the judge added.

However to mark the gravity of the situation in Mr Fay's case the judge ruled that should pay €6,000 plus VAT to Pepper's solicitors, or at Pepper's option make a donation in the same amount to a charity of Pepper's choosing.

The Judge also ruled that where there had been a similar shorting coming in a separate unrelated case the should make a payment of €2,000 plus VAT to the objecting creditor's solicitors or make a donation to a charity.