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Celtic Tiger-era Cork property developer escapes debts of €170 million in record court deal – The Irish Times


The High Court has approved a personal insolvency deal for former Cork dentist-turned-property developer Barry Harte allowing him to escape Celtic Tiger-era debts of €170 million.

Mr Harte applied for a personal insolvency arrangement (PIA) from Mr Justice Alexander Owens through which he will write off legacy debts from his collapsed property portfolio that was worth, at peak, about €650 million.

During an application to approve the PIA, Mr Justice Owens described Mr Harte’s debt as a “colossal amount of money.” Presenting the PIA to the court, Keith Farry BL, for Mr Harte, told Mr Justice Owens that the sums of money owing were “not your average quantum of debt.”

The €170 million debt write-off is the largest PIA ever approved by the court, eclipsing the €133 million debt written off for former Ireland rugby international and Pat Whelan in 2018.

Mr Farry told the court that the Timoleague-based businessman established Harte Holdings in the early 1990s, specialising in property investment and development in the residential and hospitality sector. The main focus of his business was in the Republic and London.

He said that “like many more at the time, the train came to a spectacular crash” with the 2008 financial crisis and that the 55-year-old subsequently became “an asset manager” for Nama and the other financial institutions that bankrolled his investments over the years since then.

Over time, Mr Harte reached agreement with the National Asset Management Agency – the Government’s entity set up to take bad property loans from the banks – and his lenders, KBC, AIB, Pepper and Ulster Bank to sell properties or assist receivers with the sale of assets.

Following the sale of the assets, Mr Harte is nursing “residual” debt of €170 million, but with household monthly income of just over €6,000 including the earnings of his wife Barbara, he was forced to seek a personal insolvency arrangement from the court.

Mr Farry, who was instructed by Brady Kilroy solicitors, told Mr Justice Owens that Mr Harte currently earns €2,960 a month from self-employed work in property.

The businessman has total debts of €170 million, including €144 million in unsecured debts.

He sought assistance from personal insolvency practitioner John O’Callaghan, previously with KPMG, who devised his personal insolvency arrangement.

The deal will result in unsecured creditors receiving just 0.042 per cent of what they are owed.

“Most of them will get nothing,” said Mr Justice Owens of Mr Harte’s creditors. “They are getting a tiny return.”

The judge noted that creditors would get “nothing” if Mr Harte was declared bankrupt.

“It must be approved because it meets all the statutory requirements,” said Mr Justice Owens, approving Mr Harte’s PIA.

The businessman has proposed settling his unsecured debts with a lump-sum payment of €80,000 from a contribution being made “from friends and family”, the court heard.

Some €70,000 will go to his creditors with a further €6,000 going to pay his personal insolvency practitioner and €4,000 to the Department of Social Protection in a redundancy payment.

The court was told that Mr Harte was the subject of a bankruptcy petition that was adjourned as the businessman sought protection from his creditors.

His largest creditor is Pepper Finance, which is owed a total of €78 million. Nama is owed €46 million, Ulster Bank €17 million and Everyday Finance (trading as Link Financial) €4.5 million.

Mr Harte owes significant sums to individual investors including Florence and Didier De Witte, the Belgian businessman. They are owed €16.1 million.

Other investors include pharmacist Conor and Denise Phelan who are owed €1.4 million by Mr Harte. The Phelans built up a chain of pharmacies over 15 years and sold them off in a €20 million deal in 2003.

As part of his PIA, Mr Harte is surrendering “a field” at Clanwilliam in Co Tipperary, valued at €50,000, to the Phelans who registered judgments against properties owned by Mr Harte.

The couple did not support Mr Harte’s application to secure the PIA. Ulster Bank also voted against the application, the court was told.

Under the PIA, Nama will receive just €19,000 out of the €46 million owed to the State agency.

The Cork businessman is also voluntarily surrendering a holiday property in Bundoran, Co Donegal, valued at €165,000, which will go towards repaying a €183,000 debt to EBS.

Mrs Harte’s wife Barbara has agreed to sell the couple’s home in Timoleague near Bandon on which €1 million is owed to Mars Capital. They will remain on renting and living in the house.

Mr Harte has no proprietary interest in the property since giving up his interest in the property in 2010. Mars are willing to accept €680,000, the property’s value, in settlement of her liability.

Among the others owed sums of money by Mr Harte are the late Arthur Sweetman and his wife Colette Sweetnam (€1.925 million), Tom Kingston (€800,000), Elizabeth Murphy (€707,371), Declan Cullinane (€700,000) and Robert Falconer (€457,470) and Marie Valpeters (€325,000).

During his time in business Mr Harte controlled the Horgan’s Pharmacy Group, a chain of 10 pharmacies around Co Cork which went into receivership in 2013 with substantial debts.

His other investments included an interest in Clohessy’s sports pub and Sin Bin nightclub in Limerick, fronted by former Munster and Ireland rugby player Peter Clohessy, that has closed.

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