A pending approval for a personal insolvency plan involving a debt of €3.1 million involving an individual was put on hold following preliminary doubts from a High Court Judge that it was unlikely the plan would be endorsed. Eamon Hayes, residing on Carrigaline’s Ballinrea Road in County Cork, proposed an arrangement that would relieve his debt in exchange for a €70,000 contribution from his commercial flooring company, a proposal that Justice Alexander Owens deemed unacceptable.
Justice Owens questioned the potential for a greater monetary contribution from Cork Coating Flooring Ltd, a company in which both Mr. Hayes and his spouse own half of the shares. He speculated that this could resulted in higher repayment to the creditors over a period. Pepper Finance Corporation Ireland DAC, a creditor owed €2.77 million disputed this personal insolvency arrangement (PIA) in court. Their legal representatives were barrister Cónall O’Neill and solicitor Cliodhna Walsh.
In outlining the case on Wednesday, representative for Hayes’s personal insolvency solicitor, Alan McGee, claimed the primary disagreement centred around the distribution of proceeds from the sale of 10 leased properties. An additional five properties are already sold.
Justice Owens had several remarks regarding the financial data deliberated. He looked at the €70,000 the company intended to contribute, despite having “significant reserves”. He highlighted that Mr. Hayes’ decision in 2018 to allocate half the company’s shares to his wife, despite being heavily in debt, seemed questionable.
Justice Owens emphasised the importance of considering company resources and income generation capability alongside its value and director salary choices. In the preceding year, the company exhibited a “large cash surplus” and potential to generate substantial income.
The judge was resistant to green-lighting the proposed PIA, arguing that the funds offered by Mr Hayes were spread thinly, and he could make a more substantial effort. He criticised the notion that Mr Hayes alone should determine what amount he and his spouse could withdraw from a company.
The judge criticised Mr Hayes’ claim in court documents that he didn’t believe he was the owner of the at-issue properties. He pointed out that Mr Hayes had been receiving rental income and hadn’t paid taxes on it for a decade. Furthermore, he stated that the residences were jointly purchased by Mr Hayes and his since-deceased father.
Despite Mr Hayes being in his 50s, the court was assertive that there was room for a more substantial financial contribution from him.
Court papers disclosed that Mr Hayes’s financial issues stemmed from a €3.4m commercial tracker loan, solely interest, incurred in 2007. His father Edward, who had 14 rental properties across multiple banks in 2007, was offered the commercial tracker loan by PTSB. His son Eamon was asked to join in the loans and take on the title.
Upon Edward’s death in 2010, it was maintained that Eamon Hayes, relying on a letter given to his accountants, was convinced he did not possess beneficial rights to the properties. It was only in 2021 that Eamon discovered through his PIP investigations, initiated due to complications over loan interest, that he and his father were joint property owners, and the properties ended up under Eamon Hayes’s name after his father’s death.
Following his remarks, the judge provided the PIP’s representative five minutes for instruction-taking, bluntly adding there was no chance he would sanction it. Subsequent to the instructions, the counsel requested a deferment, which the judge allowed. He acknowledged that the counsel deserved the chance to respond to the court’s findings and was against imposing something the counsel hadn’t prepared for.