A Cork publican who invested heavily in property and pubs during the boom years has had €54.64 million of “mostly residual debt” written off as part of a Personal Insolvency Arrangement (PIA) approved by the High Court.
John Gaffney (63), of Mountain Lodge, Ballyleigh, Waterfall, Co Cork, is to sell investment property at Ballykisteen, Monard, Co Tipperary, on which Mars Capital Finance has a secured debt of €381,954, as part of the arrangement.
The creditors represented at a creditors’ meeting in August of this year were owed €54.64 million but this was mostly residual debt and wholly unsecured, barrister Eoin Martin, for personal insolvency practitioner Alan McGee, told Mr Justice Alexander Owens.
The secured creditors were Mars Capital and Everyday Finance, with Everyday having a first legal charge on Mr Gaffney’s principal private residence at Waterfall.
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The loan on the house had already been restructured as part of a PIA previously agreed for Mr Gaffney’s wife, Assumpta, and was now a performing loan. The debt to Mars was secured against buy-to-let property, Mr Martin said.
The court was told Mr Gaffney’s investment assets apart from the property in Ballykisheen have already been sold. Mr Gaffney is trying to re-establish himself in the bar trade, and is a shareholder and employee of companies that run public houses on a short-term lease basis.
The companies listed in an affidavit supplied to the court were JJ Tavern Ltd; Flannerys Bar Glasheen Ltd; Washington Inn Ltd; and RPJ Stables Bar Ltd; with Mr Gaffney having varying shareholdings in each.
The principal private residence is a four-bedroom house with a market value of €650,000 already deemed appropriate under Ms Gaffney’s PIA, the court was told.
The debtor’s net household monthly income is slightly more than €8,000 per month. A second charge on the Waterfall home is only secured against Mr Gaffney’s interest in the property. The equity in the property after the Everyday debt is estimated at €306,000 and is being treated so that half is deemed unsecured debt and part of the PIA, with the other half being restructured as an 18-year mortgage with an interest rate of 1 per cent for the term of the mortgage. The monthly repayment will be €744.
A sum of €12,000 will go towards settling Mr Gaffney’s unsecured debts and Mr McGee’s fees are coming from family members, the court was told. After fees, the unsecured creditors will share slightly more than €6,000.
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