AIB to be grilled on process of debt write-off policies in wake of DJ Carey deal

Hurling legend DJ Carey had his €9.5m debt written down to €60,000. File picture: Brendan Moran/Sportsfile 

The Oireachtas Finance Committee will formally agree on Tuesday to invite AIB to explain its debt write-off policies after details emerged of a deal that let hurling legend DJ Carey escape 99.4% of his €9.5m debts. 

Committee chair John McGuinness has confirmed members will formally invite AIB to appear before TDs and senators to discuss general issues around debt write-downs and the formula the bank applies to each case.

Mr McGuinness said none of the banks will discuss individual cases and the committee could not compel them to do so but AIB will be asked to speak about the process of debt write-downs without going into specific cases.

Sports minister Thomas Byrne said AIB needed to ensure the way it operated insolvency legislation was fair.

“People need to be sure that this is available to everybody, and the process is fair to everybody,” Mr Byrne told the Irish Examiner.

Mortgage debt relief campaigner David Hall has also said AIB needs to assure the public urgently that no special deals or favours were done for Mr Carey.

Mr Hall, the chief executive of the Irish Mortgage Holders Organisation, who has negotiated debt deals with lenders for some 4,500 people over the last decade, said people needed assurances that Carey was treated the same as everyone else going through the bank’s process, and that his "celebrity" or sport star status was not a factor in the controversial deal.

People 'very annoyed'

He said many people have correctly been “animated, angry and very annoyed” since details of Carey’s 99% debt write-down deal emerged.

It was first reported by RTÉ’s Prime Time that the majority State-owned bank agreed it would write down over €9.5m in debt owed by the former Kilkenny hurler to €60,000.

The bank had secured a High Court judgment for the €9.5m on May 9, 2011, mostly arising from a €7.85m loan to Mr Carey that was secured on properties at Mount Juliet in Kilkenny and the K Club in Kildare.

But under the terms of a debt write-down agreement, the former Kilkenny hurler had to pay just 0.63% of the original amount owed to the bank, which was referred to in a settlement document as a “compromise”.

“It is fair to say that even people with nine All Ireland medals can be goosed and can be insolvent,” Mr Hall said.

“The Irish Mortgage Holders Association and my team and myself have done deals of significant percentage write-down with AIB and with other lenders where it is necessary.

“This is a robust, intimidating, torturous process that everyone goes through to ensure that is appropriate and necessary.

“Many have expressed very deep concern in relation to having been tortured and bullied by banks and vulture funds over the last 10 years, unable to secure any reasonable deal with them.

AIB must come and clarify urgently that this was done in accordance with its normal rules and no special favours were done for DJ Carey.”

Solidarity TD for Cork North Central Mick Barry described Carey’s debt deal as “gut-wrenching” in the context of all the people who were hounded by the banks at great cost to their mental health for far lesser mortgage debts.