Popular TD is a man of contradictions: Mick Wallace exits bankruptcy
A year after being declared bankrupt, Independent TD Mick Wallace is scheduled to walk away from debts of more than €30m, writes .
Mr Wallace was adjudicated a bankrupt at the High Court on December 19, last year on foot of a €2m judgment debt. He was therefore scheduled to leave bankruptcy yesterday.
Mr Wallace had been allowed to remain on in the Dáil over the past 12 months after the law was changed in 2014. Previously, TDs would automatically lose their seats if declared bankrupt.
During last December’s 10-minute hearing Ms Justice Caroline Costello granted the bankruptcy petition by the Promontoria (Aran) Ltd fund.
The fund had obtained a €2m judgment in the Commercial Court the previous January after they took over a debt owed to Ulster Bank.
Mr Wallace’s construction firm, Wallace Construction, built a number of significant developments in Dublin including the Italian Quarter on Ormond Quay and a nine-storey office block for Amnesty International on Fleet St in Temple Bar.
He had once owned 76 properties before the bankruptcy proceedings and had set up a chain of Italian wine bars in the city.
While applications can be made to extend the 12-month duration of bankruptcy, the Irish Examiner understands no such court application had been made in the case of the Wexford politician, meaning he was due to exit bankruptcy yesterday.
Mr Wallace did not respond to requests for a comment.
A spokesperson for the Insolvency Service of Ireland (ISI) said: “The ISI does not comment on individual cases, but bankruptcy will normally last for 12 months. The term of bankruptcy could be longer if someone does not fully co-operate or if they fail to disclose all necessary details.”
Promontoria, which brought forward the petition against Mr Wallace, is owned by US fund giant Cerberus.
Mr Wallace claimed that there had been an agenda to drive him into bankruptcy because he had criticised Cerberus in the Dáil. The TD had raised the role of Cerberus in the sale of Nama’s €5.7bn Northern Ireland loan book on numerous occasions in the Dáil chamber.
Speaking to the Irish Examiner after the declaration was made last year, Mr Wallace said: “Cerberus have bought over €20bn of assets and involves thousands of debtors and I am the first one it has bankrupted. They used the power of a €2m personal guarantee to bankrupt me. But it is clear to anyone there is an agenda here.”
While Mr Wallace was not forced to give up his Dáil seat, he told this paper that his salary would be restricted for up to three years.
“They have the right to take my wages for three years and give me something to live on. The bankruptcy lasts for one year but then they have the right to take my wages for three,” he said.
Famous for his flowing mop of hair and wardrobe of pink T-shits Mick Wallace is a popular politician in his native Wexford.
He topped the poll in the 2011 general election with 13,329 votes and was reelected to the Dáil in 2016.
Wallace is truly a man of contradictions who on his CV could include: builder, neutrality campaigner, non-conformist, wine-bar owner, football manager, tax-settler, advocate for whistleblowers, and politician.
A native of Wellingtonbridge, he has become known as much for his financial wranglings as he has for his impassioned speeches in the Dáil, time which he has used to highlight the treatment of Garda whistlblowers and the controversial sale of Nama’s Northern Ireland portfolio.
From being arrested at Shannon Airport, to turning up in the Dáil in a vest top, to making a multimillion settlement with Revenue, Wallace has never stayed long out of the headlines.
A keen football supporter, Wallace gained a profile as manager of the Wexford U18 county teams for two decades and was in charge of the U16s team for 13 years.
In 2006 he founded his own club, Wexford Youths FC, and gained entry to the League of Ireland.
A dedicated supporter of the boys in green he regularly travels abroad to attend Republic of Ireland matches.
Business and pleasure collided when he secured a contract to built the football complex at Ferrycarrig in Wexford at a cost of €6m which is now home to the Wexford Youths FC.
Like many developers Wallace saw his business boom in the Celtic Tiger — he was behind a number of high-profile developments in Dublin including the Italian Quarter on Ormond Quay and a nine-storey office block for Amnesty International in Temple Bar.
He also ventured into hospitality, opening a chain of wine bars in the capital, one in his own Italian Quarter and another close to Croke Park which was also part of one of his developments. As he embarked on his wine-bar venture, Wallace bought a four-acre vineyard in the Piedmont region of Italy.
In 2011 he was fined €7,000 for failing to pay pension contributions for his construction workers in 2008.
But he received a much more significant financial blow the following year when he admitted he had knowingly made false declarations and had underpaid Vat to the tune of €1.4m in respect of his M&J Wallace Limited company.
He entered a €2.1m settlement with Revenue in 2012 and claimed he had only done it in a bid to save his company. However, in the wake of his bankruptcy declaration this time last year he admitted that he had failed to pay any of the 2012 settlement money over to Revenue.
Speaking to the Irish Examiner in December of last year he said: “I’m actually not paying back the Revenue at all because I don’t have the means to do so. I was never directly paying back the Revenue.”
Adding to the controversy of the 2012 settlement was the fact that he sold his vineyard to his brother, Joseph, in 2009, at a time when he was engaged with Revenue over the under-declaration of Vat.
Wallace said he transferred the €500,000 vineyard to his brother to pay off an outstanding debt for building materials which he had received from him on credit.
Away from business, Wallace has been widely commended for his work in raising and campaigning on often difficult issues, from youth unemployment, to neutrality, marriage equality and housing. Working closely with garda whistleblowers, the UCD graduate of English, history and philosophy, was instrumental in shining a light on the penalty points scandal which led to the establishment of an independent inquiry.
He also forced a public discussion on Nama’s sale of its loan portfolio in Northern Ireland.
Bankruptcy is akin to loading up the car with all your belongings, driving it through a carwash and coming out the other side with just €6,000. That’s how solicitor and insolvency expert Bill Holohon describes the process.
For those struggling or unable to pay off large debts, bankruptcy is the final option in a process which includes negotiation and insolvency.
While it is a recognition that a person will never be able to pay what they owe and debts are written off, a person entering bankruptcy comes under various restrictions while in the process and has their property, funds, shares and other assets taken. Cash or assets up to the value of €6,000 can be kept.
The Bankruptcy (Amendment) Act 2015 brought the period of time for which a person is made bankrupt down from three years to one year. During this time a person’s assets are distributed fairly among creditors through the official assignee in bankruptcy.
In most cases, becoming bankrupt helps people keep their family homes.
Mr Holohan said that while rare enough there are cases where the family home is also given over.
However, he pointed out that there is a “use it or lose it” clause, meaning that if the home is not disposed of within three years, then ownership will be returned to the bankrupt person.
“More often than not a deal is done with the spouse to try and buy out the interest of the bankrupt and transfer the legal interest over to the spouse,” said Mr Holohan. “There are cases where, for one reason or another, either the spouse or family can’t come up with the funds to purchase out the bankrupt’s interest in the family home, or it could be that it was a ‘trophy home’ from the good old days and it’s no longer appropriate to the people’s circumstances and they can’t come up with the necessary funds. In those circumstances the family home would be sold.”
After being declared bankrupt, a person also receives a stipend to cover what is termed “reasonable living expenses” as those going through the process are entitled to a reasonable standard of living. Factors such as the number of dependents, food, clothing, health, household goods and bills, socialising and education are taken into account.
Ms Holohan said: “Essentially the Insolvency Service of Ireland has calculated a reasonable amount of income that somebody could live on. You wouldn’t be living the high life on this, it’s a subsistence existence for however long you remain in bankruptcy.”
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