herald

Thursday 12 December 2019

Ryan seeking debt write-off of €634k and to keep family home

Creditors 'will fare better if he is not made bankrupt'

Ronan Ryan and Pamela Flood. Photo: Gerry Mooney
Ronan Ryan and Pamela Flood. Photo: Gerry Mooney

Restaurateur Ronan Ryan is seeking to have €634,000 of his €1.6m debt written off under proposals that would mean him keeping the family home he shares with his wife, former Miss Ireland Pamela Flood.

The move is the latest in a series of cases in which the courts have been asked to sign off massive debt write-downs under personal insolvency legislation.

If the proposed write-down is given court approval, the businessman has pledged to repay the remaining debt of close to €1m over the next 22 years.

Under a proposed personal insolvency arrangement, Mr Ryan (49) would provide creditors with a lump sum of €80,000 and repay only €900,000 of his outstanding mortgage debt of €1.2m on the couple's home in Clontarf.

A number of other debts would also be significantly written down.

Mr Ryan's representatives argue that his creditors will fare much better under the proposed arrangement than if he is forced into bankruptcy.

However, he faces an uphill battle to get the proposed debt deal across the line as it has been opposed by two of his main creditors, vulture fund Tanager and Bank of Ireland.

He will need a judge to approve the arrangement, but may not get the opportunity to make his case unless the High Court rules in his favour next month in an appeal against a court order allowing Tanager to repossess the home.

If the arrangement is eventually approved, Mr Ryan would be 70 by the time his remaining debts are paid.

In an affidavit, he said he was seeking to pay his debts and that Tanager would get more under the arrangement than if the house was sold.

A copy of the proposed arrangement, put together by personal insolvency practitioner (PIP) James Green, of McCambridge Duffy, was filed in court last week.

Crash

Details of the arrangement were also outlined in court by Mr Ryan's barrister, Keith Farry.

Mr Ryan was a high-flying restaurateur and previously operated the popular Town Bar and Grill on Kildare Street in Dublin, while his wife presented television shows.

However, a restaurant that Mr Ryan opened in Sandyford was not successful and he got into financial difficulty around the time of the economic crash.

In court filings, he detailed how he entered an "assisted sale" agreement with lender Bank of Scotland (Ireland) in 2012, under which he agreed to the sale of their home and did not have to make any further mortgage repayments.

However, a number of proposed sales fell through for a variety of reasons.

In 2014, Mr Ryan's mortgage debt was bought by Tanager.

Earlier this year, Mr Ryan agreed to a settlement in which he consented to the vulture fund getting possession of the house at Mount Prospect Avenue, which is valued at €860,000.

The couple, who have four children, had been due to vacate the property by July 9.

However, Mr Ryan, who now has a catering business called Counter Culture with his wife, later had a change of heart and instituted last-minute personal insolvency proceedings.

In an affidavit, he said his financial position had materially improved this year.

"I am now in a position to pay and I have a good and steady income. I do not want to, and did not want to, at the time of the settlement, surrender my home," he said.

Mr Ryan secured a protective certificate in June, which was to give him 70 days' breathing space to make proposals to creditors.

However, Judge Jacqueline Linnane in the Circuit Court later granted Tanager leave to execute the possession order after hearing Mr Ryan did not inform his PIP that the consent order was already in place.

An appeal against that decision was heard in the High Court this week and a ruling is expected on October 7. The order had been stayed until then.

The court heard Mr Ryan apologised unreservedly for failing to mention the possession order when applying for the protective certificate.

Tanager opposed the appeal, arguing it would be prejudiced by any further delay in taking possession of the property.

The fund's counsel, Rudi Neuman, also said the personal insolvency system would fall apart if people did not face the consequences for non-disclosure.

However, Mr Ryan's counsel Mr Farry told the court the existence of the possession order would not have affected his client's eligibility for insolvency protection. He also said Tanager's policy was that it did not write down debt and allow debtors to stay in their principal private residence.

He said the vulture fund's strategy was to buy loans cheaply and to quickly sell the underlying asset.

"Personal insolvency is exactly the opposite of what they want," he said.

Tanager cited the fact that payments had not been made on the mortgage for up to nine years as part of its possession application earlier this year.

However, Mr Farry said his client took issue with how the non-repayment of the mortgage was being portrayed.

He said that under the 2012 assisted-sale agreement his client signed, Mr Ryan could cease all payments on the house loan and have the balance written off.

Repayments

The court heard that Mr Ryan had been making monthly repayments of €3,770 on the property since last March.

The courts have app-roved a number of large debt write-offs in personal insolvency cases.

Last March, the High Court signed off on a write-off of almost €3m for a Limerick couple who had separated.

Then last month a High Court judge said he would approve a debt write-off of about €3m for musical director Frank McNamara and his wife Theresa Lowe, a former RTE presenter.

That approval is subject to further clarification around the true value of Mr McNamara's inheritance of his parents' home and rental income on the property.

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