Independents4Change TD Mick Wallace has been adjudicated a bankrupt at the High Court on foot of a €2 million judgment. The Wexford Deputy's total debts exceed €30 million, the court was told.
Ms Justice Caroline Costello granted the bankruptcy petition by the Promontoria (Aran) Ltd fund arising from a €2 million judgment obtained after the fund took over a debt owed to Ulster Bank.
That judgment was granted by the Commercial Court last January over Mr Wallace’s liability to Ulster Bank under his guarantee of the debt of his company, M & J Wallace Ltd.
Promontoria is owned by US fund Cerberus, which is at the centre of allegations made in the Dáil by Mr Wallace concerning the acquisition of Nama's Northern Ireland portfolio. The substance of those allegations is now subject to investigations in the UK and US.
Until the law changed in 2014, a TD would automatically lose their seat if declared bankrupt but that is no longer the case.
Bid to save family home
Mr Wallace was in court for the hearing on Monday, which lasted about 10 minutes. Earlier, about 20 other people were adjudicated bankrupt by the judge on their own petitions.
When the Promontoria petition first came before the court last month, Mr Wallace sought an adjournment to allow him to engage with an insolvency practitioner and prepare a statement of assets and liabilities.
The court heard he was exploring possible alternatives to bankruptcy and engaging with Allied Irish Banks in a bid to save his family home.When the matter returned to the bankruptcy list on Monday, Keith Farry BL, for Mr Wallace, told the judge of developments since the last court hearing.
Counsel said ACC Loan Management, as Mr Wallace’s main creditor, was written to by James Green, a personal insolvency practitioner for Mr Wallace, concerning whether it would waive a secured debt cap to allow him to prepare a personal insolvency arrangement (PIA).
ACC, which obtained a €20 million judgment against Mr Wallace in 2012, would have to consent to such a waiver in order for agreement to be secured for a PIA but it was not prepared to do so, the court heard.
Edward Farrelly BL, for Promontoria, said he understood Mr Wallace's total indebtedness was more than €30 million.
Breathing space
Keith Farry said Mr Wallace had a statement of affairs for the court and had considered seeking a protective certificate, which gives debtors a 70 day breathing space from creditors.
However, as there was no reality to Mr Wallace being in a position to put together a PIA in the circumstances outlined, he was not putting up “any further resistance”, counsel said.
Ms Justice Costello said she was satisfied the fund had met the requirements of the Bankruptcy Act and would grant its petition to adjudicate Mr Wallace a bankrupt.
After the adjudication, Mr Farry said his client would co-operate fully with the bankruptcy process. His assets will now be administered by the trustee in bankruptcy, Chris Lehane.
Last January, the Commercial Court refused to grant a stay on entry of the €2 million judgment in favour of Promontoria to allow Mr Wallace to deal with various matters. A three month stay on execution of the judgment order was granted to facilitate calculation of a sum due under Mr Wallace’s guarantee in the event of an expected sale of a property at Dublin’s Ormond Quay.
In seeking the stay on entry of the €2 million judgment, Stephen Walsh BL, for Mr Wallace, said ACC had obtained a €20 million judgment against his client in 2011 and had recovered little of that. Promontoria was “naive in the extreme” if it thought it would “leapfrog” ACC and “snaffle” some asset as there was “nothing” there to execute the judgment against, counsel said.
