Week-long delay to decision on insolvency arrangement for Frank McNamara and Theresa Lowe

A judge has asked for clarification on musician Frank McNamara's financial affairs before deciding if he and his wife barrister Theresa Lowe are entitled to an insolvency arrangement with their creditors.

A High Court judge has asked for further clarification on musician Frank McNamara's financial affairs before deciding if he and his wife barrister Theresa Lowe are entitled to an insolvency arrangement with their creditors.

In a judgement given earlier this year, Mr Justice Denis McDonald said that he was minded to approving the Personal Insolvency Arrangement (PIA) but wanted certain matters including discrepancies in documents filed by Mr McNamara concerning his inheritance from his father's estate clarified.

If approved, the PIA will see the couple write off approximately €2.9m of their debts, and allow them keep their family home.

The judge, when handing down the decision last August said he was not prepared to allow matters to proceed any further until the affidavit addressing these issues is presented to the court.

Financial fund Tanager DAC, which is owed €2.26m by the couple, opposes the application to approve the couple's PIA. It has also raised issues about discrepancies concerning Mr McNamara's inheritance.

That debt is secured against the couple's family home in Dunshaughlin, Co Meath, which is valued at €550,000.

In addition to Tanager the couple owes money to parties including Bank of Ireland, Banco de Sabadell SA, and to the Revenue Commissioners.

When the matter returned before the Court today, Mr Justice McDonald said he wanted further clarification on an issue concerning the estate of Mr McNamara's late father.

The Judge said he wants a letter from the solicitors acting for the estate to clarify to the court that it is not seeking any money from Mr McNamara in respect of rental income he received for a property that the musician and his sister inherited following their father's death a decade ago.

The judge said he was adjourning the matter for a week to allow Mr McNamara's representatives obtain that letter.

Rental income from inheritance

Tanager's counsel, Rudi Neuman Shanahan Bl raised an issue about Mr McNamara's use of his share of rental income from his inheritance, of €800 per month.

Mr McNamara had since seeking the PIA in 2016 paid his share of the rental income from the property into a solicitor's account. Those monies - an estimated €30,000 - are to be used for the benefit of the creditors, the court heard.

However, prior to 2016 Mr McNamara used that income for his own purposes, counsel said. It could be the case that income, estimated to total €62,000 is owed to the estate of Mr McNamara's late father, counsel said.

If the estate took a view that those monies are due to it then the PIA as advanced to the court 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 he had given a gross figure for the total value of his late father's estate of approximately €500,000. In a subsequent document, Mr McNamara said his share of the estate was worth an estimated €181,000.

The first document counsel said did not take into account that 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.

Mr Farry added he believes it will be possible to obtain the letter sought by the court within a short period of time.

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.

Inheritance has increased in value

If approved the PIA will be funded by monies Mr McNamara will receive in an inheritance from his late father’s estate and also from the sale of five acres in Co Meath.

His inheritance, which includes his share in his parents' home, was initially estimated to be approximately €182,000.

Due to an increase in the value of properties since 2016 Mr McNamara's share of the estate is now estimated to be €250,000, Mr Farry said.

Counsel added Mr McNamara has obtained some work doing music at funerals, and some of this additional income will go to the creditors.

The proposed PIA will also be funded by lump-sum payment of €100,000 and from a €30,000 from a life insurance policy when it matures in seven years.

In his decision last August Mr Justice McDonald noted if the couple were to become bankrupt Tanager would realise 22 cents in the Euro, whereas under the proposed arrangement it would receive 27 cents in the Euro.

Unsecured creditors would likely recover 3.3 cents in the Euro, while under the proposed arrangement they will recover 5 cents in the Euro.

In the circumstances, the Judge said he was satisfied to reject objections made my Tanager against the proposal, but said issues over Mr McNamara's inheritance needed to be clarified.