Judge takes treatment of Revenue’s debt in Jay Bourke’s failed PIA ‘very seriously’

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A Superior Court judge has said he takes a mischaracterization of debt in a failed debt repayment plan by restaurateur Jay Bourke “very seriously.”

Bourke, 55, tried to secure a personal insolvency agreement (PIA) to reduce most of his 13.7 million euros in debt, but withdrew last month after an objection from creditor Pepper Finance, which was They owe 12.2 million euros.

He had also tried to rely on an unexpected float payment from an insurance broker he had invested in, but his hopes were dashed when it went bankrupt.

Mr Bourke, who ran popular bars and restaurants such as The Globe and Rí Rá, Panti Bar and Eden Restaurant, was subsequently declared bankrupt by the High Court at the request of the Revenue Commissioners, to whom he is owed €558,000.

Although his PIA application has been withdrawn, Judge Mark Sanfey sought an explanation from Mr. Bourke’s personal insolvency practitioner, John O’Callaghan of KPMG, as to how all of Revenue’s tax debt came to be classified as “preferred” in the PIA, when only a portion had preferential status.

‘language error’

Attorney Keith Farry, for the practitioner, said the categorization was a “mistake of language” used in circumstances where Revenue had made it clear that it would only opt out of the settlement if its debt was paid in full.

The practitioner sincerely apologized for the mistake, which was not intentional or intended to deceive, Mr. Farry added.

Niall Ó hUiginn BL of creditor Pepper Finance, who had raised the discrepancy at a previous hearing, said it is “unbelievable” that an accountant and personal insolvency practitioner would require legal advice to understand what senior debt is.

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He said such situations “do nothing for the integrity and trust” in the PIA system.

Any reader of the PIA was left with the “clear impression” that Revenue was legally entitled to full payment of its debt, but was not entitled to full payment with respect to the non-preferred element of its debt, he told the Court. .

Under the settlement, Pepper would have recovered less than one percent of its debt, which related to a contingent liability arising from loans taken from the Bank of Scotland (Ireland) for the renovation of a Co Meath hotel co-owned by Mr. Bourke. .

Judge Sanfey said he took the matter “very, very seriously” and could pass judgment on it at a later date.

He noted that the practitioner had a difficult job carrying out a settlement involving Mr. Bourke’s “extremely messy” issues. However, the judge was not satisfied with the practitioner’s explanation of his use of the word “preferred”, which has a “defined meaning” in the Bankruptcy Law.

The case was postponed.


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