Businessman in Cork fails to get €3m insolvency arrangement approved
Also included in the PIA was a provision where Mr Drew would contribute €42,000 as a lump sum payment to his creditors, which would provide a dividend of 1.1% of what is owed. If Mr Drew were to be adjudicated a bankrupt, the unsecured creditors would get no return. File photo
The High Court has refused to approve a Personal Insolvency Arrangement (PIA) for a businessman with over €3m in debts.
Mr Justice Mark Sanfey said that he could not approve the PIA for Daniel Drew. In his judgement, the judge said the court had no jurisdiction to entertain an application to approve the PIA, which had been rejected at a meeting of Mr Drew's creditors in 2019.
In his judgement, the judge said that Mr Drew operates a petrol and convenience store in Turner's Cross, Cork. He is a single man aged in his mid-forties, with three dependents, two of which are his adult children.
At the time of seeking the PIA in 2019, Mr Drew owed his creditors over €3m, the judge said.
Under the terms of the PIA, which was to be six months in duration, it was proposed that Mr Drew would retain a property in Rosegreen, Cashel, Co. Tipperary, which was the home of his former partner who died in 2015. That house was passed to Mr Drew for retention for his and his late partner's children.
Mr Drew's business, which had been assessed by his Personal Insolvency Practitioner (PIP) John O'Callaghan, would continue to trade after certain rationalisation measures, including the sale of certain assets, had occurred.
Also included in the PIA was a provision where Mr Drew would contribute €42,000 as a lump sum payment to his creditors, which would provide a dividend of 1.1% of what is owed. If Mr Drew were to be adjudicated a bankrupt, the unsecured creditors would get no return.
When applying for the PIA in 2019, the judge noted than an address at Aviary Lodge, Fota Island, Cork, was given as being Mr Drew's residence. He had rented that property, for just over €1,400 per month.
The proposed PIA was rejected by Mr Drew's creditors. His PIP then applied to have the PIA approved by the High Court. Mr Drew's largest creditor, Everyday Finance DAC, opposed that application.
In his judgement, Mr Justice Sanfey said Everyday's objections to the PIA included that in 2019 he was paying rent for a property in Cork when he had the use of "an investment property" in Co. Tipperary where his children resided rent-free.
Everyday said that documentation relating to the application to approve the PIA gave Mr Drew's address as being the rental property in Cork, and stated that this would not change during the course of the PIA.
It was argued by Everyday that the money expended on the rental property should be used to pay Mr Drew's debts, and that he should reside with his children in Rosegreen.
Everyday also said that arising out of this situation the PIA was contrary to the Insolvency Acts as it did not allow Everyday to recover debt due to it to the extent that Mr Drew's means reasonably permits.
In reply, Mr Drew claimed that the Rosegreen property was his residence. He accepted that he had been living in a rented property, but had moved back to Tipperary from Cork.
He also offered to contribute the rental monies to the benefit of his creditors, and that if the PIA was approved by the court his PIP would seek a variation of the PIA. Everyday's lawyers said that it opposed this proposal as it is not permissable under insolvency legislation.
In his judgement, Mr Justice Sanfey said an issue had arisen over where Mr Drew resided when the PIA was proposed. The judge noted that Mr Drew said in an adffidavit that at the relevant time the house in Rosegreen was in fact his principal private residence.
However, the judge said that no evidence had been produced to establish that Mr Drew at the time of the PIA was proposed to his creditors, resided at the Rosegreen property. None of the documentation put before the court came anywhere near to establishing that he resided there as of August 29, 2019, the judge added.
Mr Drew's averment in a sworn statement that his "permanent and full-time ordinary residence was always" in the Co. Tipperary property was "simply untrue and was flatly contradicted by the terms of the PIA," the judge said.
"That averment should not have been made," the judge said.
In all the circumstances the judge said he was dismissing the PIP's application for an order that would confirm Mr Drew's PIA.
The judge said that he was "somewhat disappointed' to have to dismiss the application. He noted efforts made by the the PIP to engage with Everyday's objections.
The PIP suggested a variation of the PIA which included extending it to 72 months in duration, and the inclusion of the rent monies for the Fota property as part of the arrangement.
Hopefully, the PIP's engagement "might provide the basis for a mutually satisfactory arrangement in the future," the judge added.
