INDEPENDENT TD Mick Wallace has admitted that he does not have the ability to repay loans worth some €19m to ACC Bank, after being ordered by a court to repay the loans.
The Commercial Court ordered Wallace, an independent Wexford TD and a former property developer, to repay the loans granted to his construction company M&J Wallace between 2004 and 2008.
Wallace had given a personal guarantee for five of the loans, but his company is now in receivership and is insolvent, RTÉ reports. Wallace consented to the judgment against him for €19,166,680.
The Irish Times added that counsel for the bank had told the court that the bank and Wallace had a good working relationship in 2009 and 2010, but this changed later in 2010 when the bank received a report on the company’s financial status, which indicated it was ‘seriously insolvent’.
The summary judgment granted against Wallace means that ACC Bank, which is now owned by Holland’s RaboBank, can take steps to recover the cash.
Outside the court Wallace said he was “not in a very good position” financially but said he accepted the judgement. ”I borrowed the money, and I can’t pay it back, so that’s my problem,” he said.
“As a public repsentative I think I have a large responsibility to uphold the law of the land and that’s what I’m doing,” he told reporters. “How banks operate in this country, [and] the way they behave towards me, is a different matter.”
The TD said he had “no idea” what may happen if the bank sought to recoup the loans from him.
In a statement this evening Wallace said he accepted the law of the land, but said he had “serious reservations regarding the manner in which some banks are operating”.
“While I have accepted full responsibility today for my company’s debt to ACC/Rabobank, I do believe that serious discussions must take place in relation to the lenders’ responsibility to their customers.
Facilities repayable on demand are unrealistic. Though facility letters commonly state the right of the bank to do this, it was never anticipated that a bank would demand and expect full repayment overnight.
Regulation needs to be put in place to ensure that the terms of every loan are realistic and that they reflect reasonableness.
Wallace acknowledged his company was “in a difficult place” and said he regretted this.
Any further action may potentially put Wallace’s Dáil seat in peril, as the bank could pursue bankruptcy proceedings against him. If he was to be declared bankrupt, he would be constitutionally barred from remaining as a TD.
“Whatever happens, happens,” Wallace told RTÉ’s Drive Time, indicating he could not predict what action ACC may take against him.
“As long as I have my health I’ll keep a smile on my face.”