A man whose property management company ran into difficulties during the financial crash has had more than €16.3 million in debt written off under a personal insolvency arrangement (PIA) approved by the High Court.
Dermot King’s creditors are financial fund Everyday Finance DAC and related entities, which between them are owed some €17.25 million after acquiring loans made to Mr King. Of that debt, €2.57 million is secured.
Under the PIA, Mr King (54), who now works as manager of Naas Oil, will remain in the €1.5 million family home at Ardreigh House, Bishopscourt, Straffan, Co Kildare, that he shares with his wife Michelle.
He will pay some €23,000 over the 12-month term of the arrangement which also provides for the sale of two other properties, one in Rosslare and one in Athy, in which Mr King has an interest. The sale of some land which is part of the family home property is also provided for.
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Barrister Keith Farry, instructed by solicitors Gibson & Associates, on behalf of John McCormack, Mr King’s personal insolvency practitioner, secured approval for the arrangement on Monday from Mr Justice Alexander Owens.
The judge said the creditor might or might not feel badly done by but it would effectively be stuck with the family home debt because Mr King’s wife is in the family home and there was not much the creditor could do about that.
The Everyday creditors did not participate in the hearing and the judge was told there was no objection to the proposed PIA.
The PIA provides for a restructuring of mortgage payments on Mr King’s home, which has a current market value of €1.5 million and an outstanding mortgage balance of some €1.01 million.
Mr King will make a contribution of some €23,931 over the 12-month term of the arrangement, including a lump sum of €15,000.
His total monthly income is given as €3,376. Set monthly costs of some €1,026, plus mortgage repayments of €1,324, will be paid out of that for the 12 months of the PIA and he also gets to keep a Land Rover valued at €5,000.
Mr King was self-employed between 2004 and 2017, trading as DMK Property Management Ltd. That business suffered during the financial crash and ceased trading due to what was described in court papers as “unmanageable and unsustainable debts”.
Mr King was unable to service the levels of debt, acknowledges he is insolvent and applied for the PIA so he can return to solvency.
Under the PIA, €570,000 will be warehoused with no interest applied for the term of the arrangement. Mr King will sell a portion of land adjoining the family home for €320,000 during the 12 months, to be offset against the warehoused debt.
Mr King is joint owner with his wife on another property in Rosslare, Co Wexford, with a current market value of €375,000. That property will be sold and his wife’s half share will be offset against the warehoused debt on the family home.
The two transactions will clear the warehoused debt and reduce the remaining home mortgage loan to some €502,000. The mortgage term will be restructured to 25 years, with repayments calculated on an active mortgage debt of €502,000.
The interest rate will remain on the current tracker rate and estimated monthly payments will be €2,449.
Mr King’s total secured debt of €2.57 million, which is owed by him only, will be restructured. Following the sale of the Rosslare property, the residual secured debt is projected to be €2.38 million and will be treated as unsecured debt. On the successful completion of the PIA, that debt will be written down and discharged.
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Mr King is sole owner of a residential investment property at Stanhope Street, Athy, valued at €150,000, on which some €1.58 million debt is secured. Its sale will reduce the reduce the residual debt to some €1.43 million.
Mr Farry said Mr King is deleveraging all his assets and selling a site on the family home property with a view to reducing the family home mortgage.
The judge said he would approve the PIA having regard to all relevant matters, including Mr King’s financial circumstances and his conduct before this application. He considered Mr King was reasonably likely to comply with the terms of the PIA, have regard to his present income and that the debt on the family home was being reduced to manageable proportions.
It seems the cost of enabling Mr King stay in his home was not disproportionately large and he noted part of the land attached to the family home property was to be sold off, the judge said.
The PIA, he concluded, is in accordance with the relevant provisions of the Personal Insolvency Acts, including being fair and equitable to each class of creditor that has not approved it.
