Accountants Who's Who - Business Plus Online
Accountants Who's Who - Business Plus Online
Accountants Who's Who - Business Plus Online
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BP SURVEY<br />
ACCOUNTANTS<br />
Do you think the new Personal Insolvency Act<br />
will give indebted entrepreneurs a second chance<br />
Jim Stafford (Friel Stafford): The new Act<br />
is a step in the right direction. However,<br />
the law fails to rehabilitate financially<br />
distressed entrepreneurs back into<br />
business, as some banks may exercise their<br />
right of veto to block schemes, particularly<br />
if they are the only creditor. The<br />
government’s insistence on only allowing<br />
arrangements for secured debt of less than<br />
€3m is particularly unhelpful.<br />
We will continue to see more and more<br />
business people move over to the UK to<br />
either avail of Individual Voluntary<br />
Arrangements or bankruptcy, as the UK<br />
procedures are tried and tested. As a bankrupt<br />
businessman may not act as director<br />
for three years under Irish legislation, he<br />
may be better off going to the UK and<br />
being discharged after just one year.<br />
Borrowers who owe several banks have<br />
a greater chance of successfully using the<br />
personal insolvency arrangements,<br />
particularly if they can persuade one large<br />
lender to vote in favour of a scheme. As<br />
matters stand, the banks have started to do<br />
debt forgiveness-type deals in advance of<br />
the legislation coming into force.<br />
Jim Mulqueen (RSM Farrell Grant<br />
Sparks): While the state-owned banks<br />
should engage in the right spirit to make<br />
the new insolvency arrangements work,<br />
there is the potential for other banks to<br />
refuse to agree to any propositions that<br />
write-off bank debt to an extent greater<br />
than the provisions they have already<br />
made. This factor is fundamentally what<br />
will make this scheme a success or not.<br />
Mike McKerr (Ernst Young): The current<br />
regime is punitive, but this new insolvency<br />
regime looks to give a level of<br />
rehabilitation. In this country, we<br />
sometimes put our head in the sand and<br />
hope these things will go away. This<br />
personal insolvency problem is not going<br />
away. It needs to be addressed.<br />
John Glennon (Baker Tilly Ryan<br />
Glennon): It is very difficult to predict<br />
the banks’ stance in relation to personal<br />
insolvency arrangements. They will<br />
effectively have the power to veto and<br />
force formal bankruptcy and it is likely,<br />
therefore, that these non-judicial<br />
arrangements will not apply to many of<br />
our entrepreneurs. Payments orders postbankruptcy<br />
are likely to be a feature under<br />
the Irish regime, similar to the UK.<br />
Gerry McInerney (McInerney Saunders):<br />
The new regime should provide entrepreneurs<br />
with certainty in situations where<br />
uncertainty abounds around unsustainable<br />
debt. However, credit providers and<br />
suppliers will be aware of the risks they<br />
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