A High Court judge has asked for further clarification concerning musician Frank McNamara's financial affairs before finally deciding whether to approve a personal insolvency arrangement for Mr McNamara and his wife, barrister Theresa Lowe.
In a judgement last August, Mr Justice Denis McDonald said he was minded to approve the arrangement but wanted certain matters, including discrepancies in documents filed by Mr McNamara concerning his inheritance from his parent’s estate, clarified.
If approved, the PIA will see the couple write off €2.9m of debt and allow them keep their family home in Dunshaughlin, Co Meath, valued at €550,000.
Financial fund Tanager DAC, owed €2.26m by the couple, opposed the application to approve the PIA and raised issues about discrepancies concerning Mr McNamara’s inheritance.
Tanager's debt is secured against the couple's home. They also owes money to parties including Bank of Ireland, Banco de Sabadell SA and the Revenue.
On Monday, Mr Justice McDonald said he wanted further clarification about an issue concerning the estate of Mr McNamara’s late father.
He wanted solicitors for the estate to clarify by letter it is not seeking any money from Mr McNamara in respect of rental income he received for a property he and his sister inherited following their father’s death a decade ago.
The matter was adjourned for a week to allow Mr McNamara’s representatives obtain that letter.
Earlier on Monday, Rudi Neuman Shanahan BL, for Tanager, raised an issue about Mr McNamara’s use of his €800 monthly share of rental income from his inheritance.
Mr McNamara, since seeking the PIA in 2016, has paid his share of the rental income into a solicitor’s account which monies, about €30,000, are to be used for the benefit of the creditors, the court heard.
Before 2016, Mr McNamara used that income for his own purposes and it could be the case that income, estimated to amount to a total €62,000 is owed to the estate of Mr McNamara’s late father, counsel said.
Music at funerals
If the estate considered those monies are due to it, the PIA would not allow the couple return to solvency, counsel said. Keith Farry BL, for the couple, said issues over the inheritance had been explained in a sworn statement by Mr McNamara.
In one document, Mr McNamara had given a gross figure for the total value of his late father’s estate of approximately €500,000 while a second document stated his share of the estate was worth an estimated €181,000.
The first document did not take into account Mr McNamara was only a co-beneficiary of the will and that costs such as legal fees and donations to charities had not been taken out of the gross value of the estate, counsel said.
Mr Farry added he believed it will be possible to obtain the requested letter from the estate’s solicitors shortly.
Mr McNamara (59) worked as musical director on the Late Late Show for 20 years while Ms Lowe (56), was a TV presenter before qualifying as a barrister.
Under the proposed PIA arrangement, which will see the couple return to solvency, they will continue to make payments on their mortgage to Tanager.
The PIA will be funded by Mr McNamara’s inheritance from his late father’s estate and from the sale of five acres in Co Meath.
His inheritance, which includes his share in his parent’s home, was initially estimated at just over €180,000 but, due to an increase in property values since 2016, it is now estimated at €250,000, Mr Farry said.
Mr McNamara has also obtained some work doing music at funerals and some of that extra income will go to creditors.
The PIA will also be funded by a lump-sum payment of €100,000 and from a €30,000 from a life insurance policy when it matures in seven years.
In his August decision, Mr Justice McDonald noted, if the couple were to become bankrupt, Tanager would realise 22 cents in the Euro as opposed to 27 cents under the PIA. Unsecured creditors would likely recover 3.3 cents in the Euro and 5 cents under the PIA.