Circuit Court approves Personal Insolvency Arrangement on unanimous approval at Creditors Meeting. The confirmation by the Circuit Court of a PIA with total unsecured creditors of €1.98M would appear to be the first major PIA that the banks have agreed to and did not opt to use their veto. The PIA was put together by Jim Stafford of Friel Stafford. The debtor’s company went into liquidation on the 4th August 2013 and the former business was disposed of to a connected party under Section 231 (1A) (a) of the Companies Act 1963 thus protecting the debtor’s income. A Debt Protection Certificate was issued by the ISI in early January 2014 and the PIA agreed at a meeting of creditors in July 2014 with the Court confirming same last week.
In just over 12 months the debtor has progressed from an insolvent company and significant unsustainable personal debt having little hope to continue, to being employed by the successor company with a workable solution to dispose of both secured and unencumbered assets which will pay a dividend to the creditors following which the debtor will have a sustainable mortgage on his house with no unsecured debt.
The success of the PIA should give confidence to other debtors to embrace the personal insolvency process as this case shows that the insolvency process through the ISI can be successful with the banks willing to agree when a realistic proposal is put together. The lower dividend on bankruptcy would appear to have been the catalyst for agreement by the creditors if the personal insolvency arrangement failed.
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© Gordon Deegan, Wed August 6th, 2014