The High Court has approved personal insolvency arrangements (PIAs) allowing a couple of pensioner age to write off most of their multimillion-euro debt.
Husband and wife property developers Kevin Brophy (72) and Jacinta Rochford (67) together owed more than €10.8 million. Mr Brophy had further unpaid loans of some €2.9 million.
More than €12 million will be written off under the plans, with unsecured creditors, all of whom supported the arrangements, sharing a €12,500 lump sum dividend, the court heard.
The interlocking PIAs allow them to keep their Ballsbridge home on Pembroke Gardens, Ballsbridge, by writing down the €1.7 million left on the mortgage to €900,000, the value of the property, which will be repaid.
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However, the court heard secured creditor Pepper Finance Corporation, whose €1.9 million debt arises primarily out of the mortgage, was withdrawing its objection to the PIAs on agreement that the plans would be altered within six weeks.
Pepper’s counsel, Niall Ó hUiginn, told the court on Monday his client was in “a bit of a straitjacket” as the court did not have the power to alter PIAs before approving them. His client has been able to agree to different proposals, he said.
It was taking a neutral position on the application in circumstances where the couple’s personal insolvency practitioner has given an undertaking that the PIAs will be varied within six weeks, he said.
Barrister Keith Farry, for personal insolvency practitioner Mitchell O’Brien, agreed with Mr Ó hUiginn’s summary of the position.
Proceeding to make the application, Mr Farry said creditors overall fared better under the insolvency deals than if the husband and wife were to be adjudicated as bankrupts.
According to the PIA applications, Mr Brophy and Ms Rochford receive a weekly salary as directors of Gladsted Properties Limited, of Coolbawn Quay, which developed Coolbawn Quay boutique resort in Co Tipperary.
The couple got into difficulty after investing in Quinlan Private, a fund run by financier Derek Quinlan that failed to achieve its projected returns. This coincided with the financial crash, which forced the couple to sell assets developed in Co Tipperary at a “significant loss”, their applications say.
Mr Justice Alexander Owens approved the PIAs.