A High Court judge has said he would approve a debt write-off of about €3 million for musical director Frank McNamara and his wife Theresa Lowe, the former RTÉ presenter.
However Mr Justice Denis McDonald has sought further clarification first around the true value of Mr McNamara’s inheritance of his parents’ home and rental income on the property, which will go towards repaying some of the couple’s debts, before he signs off on their proposed personal insolvency arrangements.
In a written ruling, the judge concluded that he was of the opinion that Mr McNamara and Ms Lowe should be entitled to an arrangement, overriding the objection of Tanager, the investment fund owned by US private equity giant Apollo which is facing the write-down of €1.7 million of almost €2.3 million in debt.
The fund bought the debt from Bank of Scotland Ireland, the original lender to the couple for their home in Dunshaughlin, Co Meath which is now worth €550,000.
The judge first wants Mr McNamara to explain in an affidavit the discrepancies in statements submitted in financial statements relating to the value of his share in his parents’ home submitted in the insolvency case.
In one statement submitted in January 2016, Mr McNamara said the value of his half-share in his parents’ house was worth €500,000 and that he received rent on the property of €800 a month.
In another statement submitted in October 2016, the value of his inheritance was put at €182,500 and there was no mention of rent.
Mr Justice McDonald said that if Mr McNamara’s means have “not been sufficiently brought to bear,” he would be unable to conclude that Tanager, which faces a significant write-down of secured debt under the proposed arrangements, “has not been unfairly prejudiced by the proposals.”
The Co Meath-based couple owe a total of €3.7 million and have sought personal insolvency arrangements under legislation passed in the wake of the financial crisis that approves the write-down of mortgage debt for individuals while permitting them to remain in their family home.
Mr McNamara (59), a former musical director of RTÉ’s Late Late Show for 20 years, and Ms Lowe (56), a well-known TV and radio presenter-turned-barrister, sought refuge from creditors in the courts after a prolonged period of financial difficulties stemming back to the early 2000s.
Mr McNamara began to experience problems in collecting musical royalties to him and the couple borrowed money to overcome what they believed would be a short-term financial troubles.
They remortgaged properties and sold a number of properties in order to make ends meet.
Until 2007, Mr McNamara had been working as a music conductor in the US and had been earning a high income, but that year he devoted significant time to an unsuccessful attempt to win a Dáil seat for the PDs in Dublin.
As a result of his foray into politics, the household income was reduced significantly and very soon afterwards the recession hit Ireland, compounding their financial difficulties.
In a 88-page ruling, the judge dismissed a series of objections raised by the US investment fund, including the fact that Mr McNamara will be 78 and Ms Lowe 75 when their new mortgage term ended.
Mr Justice McDonald noted that there was no retirement age for either barristers or musical directors and pointed out that US musician Burt Bacharach performed a series of concerts just last month in Dublin in his 90s.
“Rather than burying their heads in their hands,” the judge said, the couple were “facing up to their liabilities” and their financial adviser, James Green of the firm McCambridge Duffy, has put forward a “sophisticated and detailed arrangement” which will see the couple returned to solvency.
The judge said that during the hearing of the case Mr McNamara’s counsel, Keith Farry BL, “turned on its head” the claim by Tanager that a proposed write-down of debt was not a product offered by the investment fund in the ordinary course of its business.
Mr Farry argued that the fund claimed that it was only interested in short-term solutions which fail to recognise that the arrangement which Tanager acquired from Bank of Scotland Ireland was “in the nature of a long-term arrangement.”
The judge rejected Tanager’s objections on the basis that it would receive more money from the couple’s personal insolvency arrangements – 27 cent in the euro - than if they were adjudicated bankrupt – 22 cent in the euro.
Mr McNamara’s next largest debts are due to Bank of Ireland (€548,641), Bank of Ireland Mortgage Bank (€534,166) and Spanish lender Banco de Sabadell (€210,000).
The bulk of these debts will be written off. Mr McNamara is making a lump sum available, of which €100,000 will go towards reducing a new “live” mortgage due to Tanager to €420,000 for repayment over 19 years.
