A High Court application seeking approval of a financial arrangement that would write off the bulk of restaurateur Jay Bourke’s €13.7 million debts has been withdrawn.
The withdrawal came following an objection from Pepper Finance, which is owed €12.2 million from a contingent liability arising from Mr Bourke’s loans on Co Meath hotel Bellinter House, which he co-owned.
Pepper would be paid less than 1 per cent of its debt under his proposed insolvency arrangement.
Mr Bourke, a well-known figure on Dublin’s nightlife scene, has operated popular bars and restaurants in the city including The Globe and Rí Rá, Panti Bar and Eden Restaurant.
Last year his Berlin D2 bar lost its operating licences after video footage circulated on social media showing customers and staff flouting Covid-19 guidelines in summer 2020.
Insolvency adviser
Mr Bourke (55) had sought assistance from personal insolvency practitioner John O’Callaghan of KPMG after the Revenue Commissioners petitioned for his bankruptcy on account of the amount owed to it.
The court heard on Monday that Mr O’Callaghan was withdrawing the application. The bankruptcy petition is still live before the High Court.
Mr Justice Mark Sanfey made orders dismissing the application made under section 115a of the Personal Insolvency Act. However, the judge adjourned an element of the case so Mr O’Callaghan could explain to the court how Revenue’s claim was dealt with under the proposal.
Pepper had objected to the treatment of Revenue’s €558,000 debt as being entirely preferential under the personal insolvency arrangement, to be paid in full.
Its counsel, Niall Ó hUiginn, instructed by Beauchamps, told the court on Monday that the preferential element of the debt had been overstated by some €200,000, giving Mr Bourke’s other creditors an impression Revenue was legally entitled to be repaid in full.
Pepper had further concerns that Mr Bourke had intended to utilise anticipated funds from a return on his investment in insurance brokerage XS Direct to repay some of his debts.
Hopes of a windfall payout of €570,000-€750,000 from a flotation of XS Direct were dashed when the brokerage entered receivership in February.
Revenue debt
The practitioner’s counsel, Keith Farry, instructed by Brady Kilroy, said Revenue would come on board with the proposal only if both its preferential and non-preferential debts were going to be repaid in full. He acknowledged there was a “potential lack of clarity” in how these debts had been explained by his client.
Mr Justice Sanfey said he shared Pepper’s concerns about the treatment of Revenue’s debt, saying it “certainly would be alarming” if it was the case that Revenue was included in the proposal as a preferential creditor for a debt it was not legally entitled to.
It was not a matter he could let “slide by”, so he required an explanation from the practitioner as to how a portion of Revenue’s debt appeared to have been mischaracterised. He adjourned the hearing of this issue to a date later this month.
