Developer Michael O’Flynn’s attempt to object to neighbour’s insolvency plan goes to Supreme Court

The Supreme Court has agreed to hear developer Michael O’Flynn’s appeal against a ruling preventing him from objecting to the personal insolvency agreement (PIA) made in favour of former business partner John O’Driscoll. 

 

The developer claims Mr O’Driscoll from Ovens, Co Cork, owes him over €750,000 and was not insolvent when Mr O’Driscoll sought and was granted a PIA by the courts. 

 

The developer claims he advanced a loan to a pub business Mr O’Driscoll was involved in. As a result, Mr O’Driscoll became a signatory to a €2.2 million loan guarantee in favour of the developer and the two became shareholders in the business, it is claimed. 

 

Mr O’Driscoll rejects the claim he was not insolvent and says his PIA should remain undisturbed. 

 

Last July the High Court upheld a decision of the Circuit Court in ruling Mr O’Flynn had no right to be heard on Mr O’Driscoll’s PIA. 

 

Mr Justice Alexander Owens agreed Mr O’Flynn lacked the locus standi to be heard because, despite being invited by Mr O’Driscoll’s personal insolvency practitioner to file a proof of debt he did not do so. 

 

The judge said the 2012 Personal Insolvency Act was quite clear and participation in the creditor process depends on proof of debt. 

 

The developer applied to the Supreme Court for permission to hear his appeal against the refusal. 

 

In a written determination, a three-judge panel of the Supreme Court, comprising Chief Justice Donal O’Donnell, Ms Justice Elizabeth Dunne and Ms Justice Iseult O’Malley, agreed the appeal raised a matter of general public importance. 

 

The issue relates to the interpretation of the 2012 Insolvency Act, and Mr O’Flynn’s entitlement to raise an objection, the panel held. 

 

The issue raised would affect other cases and will bind the lower courts in future cases, the panel said. 

 

There should be definitive guidance on the interpretation of the Act and the procedure to be followed, it said. 

 

The appeal will be heard at a later date. 

 

Mr O’Flynn’s opposition to the PIA relates to an alleged debt of €750,000 plus interest owed to him relating to a guarantee on a €2.2 million loan to Ezeon Entertainment Ltd, a company set up in 2007 and which operated the Silly Goose pub in Cork. 

 

The loan was used in 2014 to pay off money owed to a financial fund that acquired loans advanced to the company. 

 

The other guarantor on the loan, and shareholder in Ezeon, is former rugby player and coach Ronan O’Gara. 

 

In a separate but related case, lawyers representing Ezeon have asked the High Court to set aside Mr O’Driscoll’s PIA. 

 

That application, supported by Mr O’Flynn and Mr O’Gara, which is pending before the High Court, is opposed by Mr O’Driscoll, who denies any wrongdoing. 

 

Mr Justice Owens is due to fix a date for the hearing of the preliminary issue regarding whether the High Court has the jurisdiction to hear Ezeon’s application. 

 

The Irish Times