Sales assistant has €1.1m debt written off with €900 going to creditors

High Court reporters

The High Court has approved a Personal Insolvency Arrangement allowing a sales assistant write off more than €1.1 million of debt owed mainly to financial institutions.

Mr Justice Alexander Owens approved a PIA which will allow 52-year-old Fergal Shine, with an address at Waterville, Bealnamulla, Athlone, Co Roscommon, to return to solvency.

The court heard that Mr Shine got into financial difficulties over personal guarantees he had signed in respect of the debts of a construction he had shared with his father and brother.

The company got into difficulties in 2007, resulting in Mr Shine and his relatives taking measures including selling assets they held to reinvest in the company, and they stopped taking a wage from the firm.

Despite their efforts the company went into liquidations in 2008.  Arising out of the guarantees several judgements were obtained against Mr Shine.

Arising out of his financial difficulties Mr Shine entered into the insolvency process and obtained the services of Personal Insolvency Practioner PIP Mr Colm Arthur.

The PIP put together a PIA, which the Circuit Court had refused to approve.

That decision was appealed by the PIP to the High Court.

Under the terms of the PIA, which is 13 months in duration, Mr Shine will retain his family home, which he shares with his wife and their three children.

He had unsecured debts of just over €1m, which is owed to parties including the Bank of Ireland, and building suppliers including the Chadwicks Group and Ganleys Hardware, are to be written off in return for small dividends.

Mr Shine will contribute a lump sum of €3,000 towards the PIA, with €2,100 being paid to the PIP to cover the cost of the PIA, while the remainder will be paid to his creditors.

In addition, under the PIA the mortgage, where €362,000 remains due and owing to Pepper Finance, on his family home, which has an estimated value of €245,000, is to be restructured.

Over €110,000 of what is owed on the mortgage is to be written off while the remainder will be repaid over the next 240 months (20 years).

In order to repay his debts, the court heard that Mr Shine had sold interests he held in assets including an apartment and sites of land.

The proceeds of those sales are to go to his creditors.

Keith Farry Bl, for the PIP told the court that Mr Shine's creditors would do better under the proposed PIA compared to having Mr Shine adjudicated a bankrupt.

Mr Justice Owens said he was satisfied that in this case all the required criteria that would allow the court to approve the PIA had been met.

There were no objections to the application.