The High Court approved a Personal Insolvency Arrangement for Thomas O’Connor of Gorey, County Wexford, despite the arrangement not securing creditor approval at a meeting. The ruling allowed the arrangement to proceed under section 115(a) of the Personal Insolvency Act, as amended in 2015.
Ms Justice Baker delivered the ex tempore judgment on 18 April 2016. The application was unopposed at the hearing. The court noted that Pepper Finance Limited, which had voted against the arrangement, did not attend to oppose the application and had not objected to the arrangement coming into force when the application was issued.
The judge found that O’Connor had a mortgage on his principal private residence that qualified as a relevant debt under the legislation and was a sustainable mortgage. She said the statutory provision enabled the court to limit the effect of a creditor veto in cases involving a family home mortgage.
The court was satisfied that the arrangement offered a reasonable prospect of resolving O’Connor’s debts without bankruptcy. It also found that the proposal would allow him to continue occupying his home, where he lived with his wife and three children, and that the accommodation was suitable for his needs. The judge said bank statements showed that he had been seeking to pay the mortgage over the preceding two years and had been meeting mortgage payments.
The judge further found the arrangement fair to creditors and not disproportionate. She was satisfied that creditors would receive a better return under it than they could expect in bankruptcy. The court also found that creditors had been served with the application and the necessary paperwork, and that the application was properly before it.
The order approved the Personal Insolvency Arrangement notwithstanding the creditors’ meeting result. The judgment records that the arrangement had been accepted by the family home mortgage creditor, while one other creditor refused consent. The court’s ruling addressed the statutory approval application; it did not record any separate finding against Pepper Finance Limited. Justice Baker cautioned that the reasoning should be understood in the context that the ruling was ex tempore and the application was not opposed.