Fund objects to businessman’s proposed insolvency arrangement

A financial fund is objecting to a proposed personal insolvency arrangement under which a businessman would secure a €70m write-off of debt. Conor Clarkson of Cainfort, Enniskerry Road, Stepaside, Dublin 18 is seeking to have his PIA approved by the High Court.

Promontoria (Arrow) Ltd, which says it is owed €64 million by the debtor, is objecting to Mr Clarkson’s PIA being approved on grounds it is prejudiced by the proposed arrangement. If the PIA is approved by the court it will allow Mr Clarkson, who was involved in property development, to return to solvency.

At a creditor’s meeting earlier this year the PIA was approved by the majority of Mr Clarkson’s debtors, mainly financial institutions. The debts are due to property investments by Mr Clarkson made before the banking crisis and property crash of 2009-10. Included in the proposed PIA is a lump sum of €100,000, which has been available to the businessman’s debtors. The monies have been provided by a relative of Mr Clarkson. He will also retain his family home under the PIA.

His Personal Insolvency Practitioner (PIP), Mitchell O’Brien, said Mr Clarkson’s debtors will do better through the PIA than if he is made a bankrupt. The lump sum would not be available in the event Mr Clarkson was adjudicated a bankrupt. Mr Clarkson has over the last number of years worked with his creditors and has implemented a sale strategy in respect of properties he had an interest in. The case was mentioned before Mr Justice Denis McDonald on Monday.

Promontoria, represented by Eoin Martin BL, sought an extension of time to file its objection to court approval of the PIA. In a sworn statement, Promontoria said its objection was filed outside the permitted 14-day period because the person handling the case on its behalf mistakenly believed they had until March 1st last to file the objection.

Mr Martin said the money owed to his client by Mr Clarkson represented some 94 per cent of his total debts, the fund is his largest creditor, and it was always its intention to file an objection. The fund had voted against the PIA at the meeting of Mr Clarkson's creditors in late January. Keith Ferrie BL, for Mr Clarkson's PIP, said his side was not objecting to the extension, but the explanation given by the fund as to why the objection was not filed in time was not satisfactory.

Mr Justice McDonald, noting the PIP’s “prudent” attitude towards the application, said he would grant the extension. The judge said there was no automatic entitlement to such an extension, adding he was not satisfied with the “broad brush” reason advanced by the fund in its sworn statement as to why the objection was not filed on time. The matter will be mentioned before the court later this year.