A HIGH Court judge has said a former Fianna Fáil councillor who “enjoyed the good life” before his auctioneering business in effect collapsed will have to make “a radical alteration to his lifestyle” given his “enormous debts”.
Mr Justice Peter Kelly said yesterday he would free up some accounts of Gerard Killally to service debts and some expenses but would not make orders allowing for some €16,000 a month sought by Mr Killally for household and other expenses.
Mr Killally, whom the judge noted lived in a nine-bedroom house, “must come to his senses and radically reduce his living standards to take account of his indebtedness”.
The fact Mr Killally, Shean, Edenderry, Co Offaly, had not acted wisely regarding his financial affairs was illustrated by his purchase of a new Audi Q7 SUV after his auctioneering business collapsed in 2008, the judge added.
Bank of Ireland had also secured judgment orders for some €2.6 million against Mr Killally and his wife, other actions were pending against him and he had “enormous debts”.
Mr Justice Kelly made the remarks when agreeing to some variations of the court’s order last month freezing Mr Killally’s accounts below €8 million.
The variation includes allowing Mr Killally living expenses of some €10,000 a month to come from a councillor’s salary of some €17,000 annually, any surplus rental income on several properties owned by him and/or his wife after mortgage payments on those properties are met from that rent, and any other income.
The judge said he suspected there would be no additional income and the €10,000 a month figure may have to be achieved by borrowings from the families of Mr Killally and his wife. The couple have received up to €120,000 from their families to date.
The court had heard Mr Killally and his wife had borrowed €10.7 million to buy various properties, including nine holiday homes in Tullamore and houses and shop units in counties Laois, Westmeath and Dublin.
Rental income from the various properties is used to service mortgages on them and the judge directed accounts could be freed up so as to allow that happen. It would be in no party’s interest if the mortgaged properties were repossessed for non-payment of the mortgages, he said.
The judge also made an order allowing Mr Killally sell a number of properties in Edenderry.
Any proceeds of sale are to be paid into court from which Mr Killally could discharge his legal expenses.
The varied order applies pending the outcome of a hearing next June to determine the amount of damages to be paid by Mr Killally and former Co Offaly GAA manager Richie Connor arising from their admissions earlier this year to having made secret profits in two land deals which they did not disclose to their business partners.
Mr Killally had asked the judge to discharge the freezing order in total and instead accept his undertakings not to reduce his assets below €8 million.
In his decision, Mr Justice Kelly said he would not accept undertakings in lieu of the order as the making of secret profits involved behaviour of a dishonest kind.
