Well-known publican and restaurateur Jay Bourke faces bankruptcy after €12.2m debt deal falls through

5th April 2022

Well-known publican and restaurateur Jay Bourke is facing the prospect of bankruptcy after his application for a personal insolvency arrangement (PIA) writing off €12.2m in debt was dismissed by the High Court.

The businessman, who at one stage had pub and restaurant interests employing more than 1,000 people, has total debts of €13.7m.

A debt deal devised by his personal insolvency practitioner was objected to by his main creditor, Pepper Finance Corporation, which is owed almost €12.3m.

The massive debt stems from Mr Bourke’s involvement in Bellinter House, the Co Meath hotel he co-owned with the late music promoter John Reynolds. Pepper stood to recoup just €65,000 if the PIA had been approved and claimed the arrangement was unfairly prejudicial to its interests and that it would get a better financial return if Mr Bourke (55) was declared bankrupt.

When the matter was listed before the High Court this morning, Keith Farry, counsel for Mr Bourke’s personal insolvency practitioner John O’Callaghan of KPMG, said the application could be dismissed.

It means a bankruptcy petition filed by the Revenue Commissioners against Mr Bourke in January can now be heard.

“The Revenue Commissioners are fully free to proceed against Mr Bourke and it would appear they will adjudicate him bankrupt in due course,” said Mr Farry.

It is thought the dismissal came after a key part of Mr Bourke’s arrangement fell through.

It had been proposed that some debt, between €570,000 and €750,000, would be repaid from a return on an investment Mr Bourke has in insurance brokerage XS Direct, which he expected to be floated on the stock market.

Those plans were scuppered when receivers were appointed to the brokerage in February.

Mr Justice Mark Sanfey agreed to dismiss the application with no order as to costs.

One outstanding matter in the case will be dealt with later this month.

Niall Ó hUiginn BL, for Pepper, raised concerns that the debt Revenue had been entitled to recover was overstated by €200,000 in the PIA and the court is to hear further evidence the on the issue.

The issue related to an apparent lack of distinction between preferential and non-preferential debt.

Mr Farry said there was a potential lack of clarity in how these debts were classified and that lessons had been learned in that regard.

He also said Revenue had sought to have all of what was owed to it, whether preferential debt or not, repaid.

Mr Justice Sanfey asked if the practitioner could provide an affidavit on the issue.

“I don’t think I can let this go,” he said.

“If the preferential creditors are overstated it reduces the amount payable to the unsecured creditors. That is a matter of extreme concern for any unsecured creditor,” he said.

Had Mr Bourke been successful in getting the PIA, the deal would have allowed him to keep his €1.4m family home in Rathmines, south Dublin.

Pepper had also objected to this, arguing that due to the scale of his indebtedness, it was unreasonable for Mr Bourke and his wife to retain their home.

The Revenue, which is owed €558,000 according to the PIA, had supported the arrangement.

Both the taxman and Mr Bourke’s mortgage lender would have been repaid in full. However, unsecured creditors such as Pepper would have seen debts owed to them significantly written down.

Mr Bourke has been in the pub, restaurant and hotels business since 1989, first opening the Wolfman Jack’s restaurant in Rathmines.

He went on to open Rí Rá nightclub, The Globe bar, the Front Lounge and Eden restaurant in Dublin, as well as Bodega and the Savoy in Cork, the Garavogue bar in Sligo, and the Café Bar Deli group.

His debt to Revenue stems from a capital gains tax liability of around €500,000 after he sold Bodega bar.

Mr Bourke attempted to offset this gain against the substantial loss in value of Bellinter House.

However, his attempt to do so was opposed and he lost appeals at the Tax Appeals Commission and later in the Circuit Court.

Other debts relate to small bank loans he was unable to pay off or from personal guarantees he couldn’t honour following the financial crash in 2009.

He maintains that his companies were left vulnerable by the crash as the properties they leased had upward-only rent reviews.

In 2017 the High Court disqualified him from acting as a company director for seven years arising out of 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 it was at the centre of controversy over a boozy brunch event in August 2020 at which social distancing regulations were breached,

The Berlin D2 incident led gardaí to successfully object to the renewal of its licence.