Application to write off bulk of restaurateur’s €13.7m debts withdrawn

Jay Bourke: Had sought assistance after the Revenue Commissioners petitioned for his bankruptcy on account of the amount owed to it. File picture

A High Court application seeking approval of a financial arrangement that would write off the bulk of restaurateur Jay Bourke’s €13.7m debts has been withdrawn.

The withdrawal came following an objection from Pepper Finance, a creditor owed €12.2m from a contingent liability arising from Mr Bourke’s loans on Co Meath hotel Bellinter House, which he co-owned.

Pepper would be paid less than 1% of its debt under his proposed insolvency arrangement.

The court heard yesterday that Mr Bourke’s personal insolvency practitioner, John O’Callaghan of KPMG, was withdrawing the application. The bankruptcy petition is still live before the High Court.

Mr Bourke, 55, had sought assistance from Mr O’Callaghan after the Revenue Commissioners petitioned for his bankruptcy on account of the amount owed to it.

Mr Justice Mark Sanfey made orders dismissing the application made under section 115a of the Personal Insolvency Act. However, the judge adjourned an element of the case so Mr Bourke’s personal insolvency practitioner could explain to the court how Revenue’s claim was dealt with under the proposal.

Pepper had objected to the treatment of Revenue’s €558,000 debt as being entirely preferential under the personal insolvency arrangement, to be paid in full.

Its counsel, Niall Ó hUiginn, instructed by Beauchamps, told the court the preferential element of the debt had been overstated by some €200,000, giving Mr Bourke’s other creditors an impression Revenue was legally entitled to be repaid in full.

Pepper had further concerns that Mr Bourke had intended to utilise anticipated funds from a return on his investment in insurance brokerage XS Direct to repay some of his debts. Hopes of a windfall payout of €570,000 to €750,000 from a flotation of XS Direct were dashed when the brokerage entered receivership in February.

The practitioner’s counsel, Keith Farry, instructed by Brady Kilroy, said Revenue would only come on board with the proposal if both its preferential and non-preferential debts were going to be repaid in full. He acknowledged there was a “potential lack of clarity” in how these debts had been explained by his client.

Mr Justice Sanfey said he shared Pepper’s concerns about the treatment of Revenue’s debt, saying it “certainly would be alarming” if it was the case that Revenue was included in the proposal as a preferential creditor for a debt it wasn’t legally entitled to.

It was not a matter he could let “slide by”, so he required an explanation from the practitioner as to how a portion of Revenue’s debt appeared to have been mis-characterised. He adjourned the hearing of this issue to a date later this month.

Mr Bourke has operated popular bars and restaurants in Dublin city including The Globe and Rí Rá.