Cork developer can’t object to neighbor’s PIA on €2.2m loan

Cork developer Michael O’Flynn has been blocked by the High Court from raising objections to neighbor John O’Driscoll’s personal insolvency deal over a security on a £2.2million loan euros.

The promoter who argued that Mr O’Driscoll of Ovens, Co Cork and a brother of rugby international Mick O’Driscoll was allegedly not insolvent has failed in his bid to overturn a Court of circuit that he had no right to be heard on the matter.

In the High Court, Mr Justice Alexander Owens upheld the Circuit Court’s decision that because Mr O’Flynn, who had been asked by Mr O’Driscoll’s personal insolvency practitioner to file evidence of debt, had not done so, he had no standing. which is a right to be heard.

Mr Justice Owens, in a decision from the bench, said “a person who has not proven their debt might as well be in Burundi, that person is not engaged in the process”.

The judge said the Personal Insolvency Act was fairly clear and that creditors’ participation in the process depended on proof of debt.

Costs

Judge Owens also awarded costs to Mr. O’Flynn.

The High Court decision is seen as significant compared to other personal insolvency cases. This means the personal insolvency settlement for Mr O’Driscoll is now proceeding as planned.

The O’Flynn claim relates to an alleged debt of €750,000 plus interest relating to a guarantee on a loan of €2.2 million to Ezeon Entertainment Ltd, a company created in 2007 which operated the Silly Goose, a pub in Cork that went up for sale last month.

The other loan guarantor is listed in court documents as Ronan O’Gara of Douglas, Co Cork, coach and former rugby player.

In an affidavit to the court, Mr O’Flynn, also from Ovens, Co Cork, said Ezeon bought and refurbished the pub financed by loans from Anglo Irish Bank.

Economic downturn

The company traded successfully for about two years, but with the economic downturn, business was affected and the loans were transferred to NAMA who then sold the loan to Blackstone, the American private equity investor.

Mr O Flynn took over the debt from Blackstone in 2014 and the loan guarantee was put in place.

Last year, Mr. O’Driscoll received a Certificate of Protection, which protects a debtor from creditors while a PIA, or other debt settlement arrangement, is formulated.

A PIA drafted by practitioner Alan McGee was then approved at a meeting of creditors in January this year. Mr. O’Flynn did not attend or vote at the Meeting.

The approved PIA related to a debt of €339,000 with two main creditors, a bank and Revenue. Mr. O’Flynn’s claim was recognized as an unjustified claim and assigned a nominal value of €1.

Mr O’Driscoll’s lawyer, Niall O hUiginn BL, on behalf of Eugene Carley’s lawyer, told the court that Mr O’Driscoll was clearly insolvent.

Mr O’Flynn, he said, had a “fundamental misunderstanding” of personal insolvency.

Mr O’Flynn, the lawyer said, wanted to hold the alleged debt on Mr O’Driscoll.

“Proving a debt must mean something. Mr. O’Flynn has not proven his debt. He chose not to. He is not above the process, ”added the lawyer.

Other creditors, he said, had engaged in the process, but one had “stayed away throwing rocks”.

Mr O’Flynn’s solicitor Ciaran Lewis SC argued that his client was stuck within the legal scheme but not outside it.

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