A 74-year-old farmer from Carlow has saved his land from sale through a personal insolvency arrangement (PIA).
The farmer owed a number of debts totaling €215,000, €100,000 of which was secured over the 60ac farm which is now being farmed by his son.
A secured creditor had instigated the process of selling the land, but the sale was stopped and the farmer had a proposal put to all creditors to repay the debt by personal insolvency practitioner Gary Digney of PKF-FPM Accountants Ltd.
In a first-of-its-kind agreement, income from the farm, which is now run by the farmer’s son, will repay the debts owed by his father under the terms of the arrangement.
This has meant that the lands will not be sold and all creditors will get paid over a 10-year period.
Interest and capital
Under the proposal, the secured creditors are to be paid interest and part capital for six years, which allows the unsecured creditors to be paid in full over the six-year PIA period.
The secured creditors will then be paid in full from year six to year 10 of the arrangement.
All three creditors who held security over the farmlands rejected the proposal.
However, Digney was able to make a court application on behalf of the farmer under the Personal Insolvency Acts to approve the arrangement, regardless of the objections of the secured creditors.
Time to pay
Commenting on the case, Digney said: “Most farm cases do not involve a write-down, but rather will require time to pay the debt back at a sustainable level, as in the case here.
“The farmer’s son was running the farm and stands to inherit it. This PIA allows this farmer and his son the opportunity to repay the restructured debt without the threat of losing the farm on a sustainable affordable basis.”
In another farming case brought by Balbriggan-based Digney, a farmer based in Co Wicklow successfully restructured combined debts in the amount of €240,000 over a 10-year period.
This was despite the rejection of the proposed arrangement by Everyday Finance DAC, which was owed approximately €215,000.
The fund appointed a receiver over the farmlands and placed the land for sale on an online auction, but the sale was stopped and Digney put a PIA proposal to creditors.
Again, he made an application to the court, with the fund ultimately not objecting to the arrangement being approved by the court, despite having previously rejecting it.