A former Fianna Fáil councillor and unsuccessful 2020 general election candidate has had €4 million in debts written off in a personal insolvency deal approved by the High Court.
Eddie Mulligan (55), who served on Waterford City and County Council from 2014 until he resigned his seat in August 2022, secured a personal insolvency arrangement (PIA) that will allow him to retain his family home, a 350-sq-metre property on the outskirts of Waterford.
In the High Court on Monday, Mr Justice Alexander Owens approved the PIA - a type of debt restructuring that allows insolvent individuals escape debts - that will result in a sum of just over €5,000 going to his creditors to satisfy debts of just over €4 million.
The court was told that Mr Mulligan’s financial difficulties date back to the 2008 economic crash when his properties collapsed in value, he fell into negative equity on his mortgages and lost rental income. His difficulties resulted in him falling into arrears on his debts.
Mr Mulligan’s debts arose from money borrowed for property partnerships with his brother and another individual and from personal guarantees given in respect of loans on his family’s painting and decorating business.
A hairdressing business run by his wife Dervla collapsed, contributing to their difficulties, and was liquidated. The failure of the business and the subsequent proceedings to restrict the couple as directors had “a serious impact on our health and mental health”, Mr Mulligan told the court.
He described engaging with his creditors during his financial difficulties as “extremely challenging” and those dealings became “increasingly frustrating and stressful” with the added complication of having his debts passed from Irish Nationwide to an investment fund.
Mr Mulligan told the court that he engaged personal insolvency practitioner Mitchell O’Brien to help resolve his debts so he could “move forward with my life able to repay my debts in a rational and orderly manner, free from fear and threat of legal proceedings and our home being taken from us”.
Prior the PIA, Mr Mulligan had debts totalling €4.8 million, with the bulk of these liabilities, almost €3 million, being unsecured, without supporting properties backing the debt. He told the court that the PIA would allow him to live his life “free from the shackles of my debts and move forward with my life as a solvent gentleman”.
Everyday Finance, which is owed a total of €2.75 million by Mr Mulligan, is set to lose the largest sum of all his creditors. Bank of Ireland is owed €1.4 million.
Some €480,000 of Everyday’s debt relates to a personal guarantee on money loaned to Waterford Paint Sales Limited, which was signed by Mr Mulligan in 2011.
Pepper Finance, the holder of the mortgage on Mr Mulligan’s home, is owed €608,000. A local credit union, St Dominic’s, is owed €30,364, according to Mr Mulligan’s PIA.
Keith Farry BL, representing Mr Mulligan’s personal insolvency practitioner, told the court that the former councillor will retain the family home, a four-bedroomed house at Knockboy on the Dunmore Road in Waterford, worth €425,000 which he shares with his wife and their dependent child.
The debt write-off arrangement, running over a 13-month period, will see the mortgage reduced from €608,000 to €425,000, the market value of the property, to be paid off over 20 years.
Properties owned by Mr Mulligan - a commercial unit, a retail unit with an overhead apartment and a site at Waterside, Waterford - will be sold under the arrangement. A lump sum of €9,875 to fund the PIA will be split between creditors, who will receive just over €5,195, some €4,680 which will go to Mr O’Brien’s fees.
Mr Farry told the court that Mr Mulligan’s creditors will receive more money under the PIA than if the former councillor was to be adjudicated a bankrupt. There was no opposition to Mr Farry’s application and Mr Justice Owens said he was satisfied from the evidence put before the court to approve Mr Mulligan’s PIA.