Record €60m debt write-off for former quarry operator gets High Court approval
A former quarry operator has had a €60m debt write-off approved by the High Court – the largest ever under personal insolvency legislation.
Enda Patrick Whelan’s debts included €56.4m owed to Nama, mostly due to personal guarantees given to Anglo Irish Bank in respect of companies in the Whelan Group.
Three of those companies are now in liquidation and one is in receivership.
The businesses got into difficulty due to the collapse of the building industry.
The 46-year-old will retain his family home in Ennis, Co Clare, valued at €230,000, under his personal insolvency arrangement (PIA).
His creditors will receive a lump sum of €56,300 under the arrangement, devised by personal insolvency practitioner (PIP) Jim Stafford.
Creditors will get dividends ranging from just 0.01 cent to 1.37 cent in the euro.
But counsel for the PIP, Keith Farry BL, told Mr Justice Mark Sanfey creditors would receive no return whatsoever if Mr Whelan went into bankruptcy.
The court heard Mr Whelan’s household income was now €2,175 and, after reasonable living expenses were taken into account, he had “no surplus” to make any additional payments to creditors.
Nama originally objected to the arrangement, but its counsel, Eithne Corry BL, said the objections were withdrawn after some changes were made. These included lengthening the three-month arrangement by having an effective supervision period of a year.
The court heard Mr Whelan owed Bank of Ireland just €4,685 on the mortgage of the family home he shares with his wife and young child and that he will continue to make monthly mortgage payments of €716. However, Cabot Asset Management and Bank of Scotland (Ireland) had judgment mortgages valued at €1.4m each over the family home, while Everyday Finance was also owed €905,000.
The judgment mortgages will now be deregistered under the terms of the PIA.
In an affidavit, Mr Whelan said that if the PIA application had failed, he would have petitioned for bankruptcy.
He said his liability to Nama did not relate to money he personally borrowed, but rather a personal guarantee he gave as an additional guarantee for the company borrowings.
“The economic downturn and collapse of the building industry in recent years has resulted in the liquidation of these companies which left substantial borrowings for which I am personally liable.”
Mr Whelan said he became “instantly insolvent” when the guarantee was called in.
The impact of having legacy debts hang over him for almost a decade had been “considerable” and included “great stress” and difficulty getting a proper night’s sleep.
Mr Whelan said he had spent years engaging with creditors with no resolution.
He said he was now self-employed and working three days while providing care for his elderly father and that the job prospects for a 46-year-old quarry machine operator in the mid-west were limited at present.