Well-known publican and restaurateur Jay Bourke faces bankruptcy after €12.2m debt deal falls through
Well-known publican and restaurateur Jay Bourke faces bankruptcy after his application for a Personal Insolvency Agreement (PIA) canceling a £12.2million debt was rejected by the High Court.
he businessman, who at one time had interests in pubs and restaurants employing more than 1,000 people, has total debts of 13.7 million euros.
A debt agreement devised by his personal insolvency practitioner has been challenged by his main creditor, Pepper Finance Corporation, which owes nearly 12.3 million euros.
The massive debt stems from Mr Bourke’s involvement in Bellinter House, the Co Meath hotel he owned with the late music promoter John Reynolds. Pepper could only recover €65,000 if the PIA was approved and claimed the arrangement was unfairly damaging to his interests and that he would get a better financial return if Mr Bourke (55) were declared bankrupt.
When the case went to the High Court this morning, Keith Farry, solicitor for Mr Bourke’s personal insolvency specialist John O’Callaghan of KPMG, said the claim could be dismissed.
It means a bankruptcy petition filed by revenue commissioners against Mr Bourke in January can now be heard.
“The tax commissioners are entirely free to prosecute Mr. Bourke and it looks like they will declare him bankrupt in due course,” Mr. Farry said.
The dismissal is believed to have come after a key part of Mr Bourke’s arrangement failed.
It had been proposed that part of the debt, between €570,000 and €750,000, would be repaid from a return on an investment by Mr Bourke in the insurance brokerage company XS Direct, which he expected to see an IPO.
Those plans were canceled when receivers were appointed to the brokerage in February.
Judge Mark Sanfey agreed to dismiss the claim without an order as to costs.
An outstanding issue in the case will be dealt with later this month.
Niall Ó hUiginn BL, for Pepper, raised concerns that the debt Revenue was entitled to collect was overstated by €200,000 in the PIA and the court needs to hear further evidence on the matter.
The problem concerned an apparent lack of distinction between preferential and non-preferred debt.
Mr Farry said there was a potential lack of clarity in how these debts were categorized and lessons had been learned in this regard.
He also said that Revenue had sought to collect everything owed to it, whether it was preferential debt or not.
Judge Sanfey asked if the practitioner could provide an affidavit on the matter.
“I don’t think I can let this go,” he said.
“If preferred creditors are overestimated, it reduces the amount to be paid to unsecured creditors. This is a matter of extreme concern for any unsecured creditor,” he said.
Had Mr Bourke been successful in securing the PIA, the deal would have allowed him to keep his €1.4million family home in Rathmines, south Dublin.
Pepper had also opposed it, arguing that because of the extent of his debt, it was unreasonable for Mr. Bourke and his wife to keep their house.
The tax authorities, who are owed €558,000 according to the PIA, had backed the arrangement.
Mr. Bourke’s tax authorities and mortgage lender have reportedly been fully reimbursed. However, unsecured creditors such as Pepper would have seen their debts significantly reduced.
Mr Bourke has worked in the pub, restaurant and hotel industry since 1989, first opening Wolfman Jack’s restaurant in Rathmines.
He went on to open Rí Rá nightclub, The Globe bar, Front Lounge and Eden restaurant in Dublin, as well as Bodega and the Savoy in Cork, Garavogue bar in Sligo and the Café Bar Deli group.
His debt to Revenue stems from a capital gains tax of around €500,000 after selling the Bodega bar.
Mr. Bourke attempted to offset this gain with the substantial loss in value of Bellinter House.
However, his attempt to do so was met with opposition, and he lost appeals to the Tax Appeals Commission and later to the Circuit Court.
Other debts relate to small bank loans he was unable to repay or personal guarantees he was unable to honor following the financial crash of 2009.
He argues that his businesses were made vulnerable by the crash because the properties they rented only had upward rent reviews.
In 2017 the High Court disqualified him from acting as a company director for seven years following the liquidation of the former Shebeen Chic pub on South Great George’s Street in Dublin.
Mr Bourke was the manager of the Berlin D2 bar on Dame Street in Dublin when he was at the center of a controversy over a boozy brunch in August 2020 in which social distancing rules were broken,
The Berlin D2 incident led gardaí to successfully oppose the renewal of its license.