Repossession of a business premises

KC1981

Registered User
Messages
2
I am involved with horses and the Livery yard where I keep my horse is in financial trouble since the recession but they have managed to keep the business viable to date. The financial issues are largely related to the mortgage on the business premises, as it is in negative equity to a large degree.
In the last few months it has come to a head and the bank have appointed a receiver. The yard went on the market briefly priced at 25% of the mortgage but after a court appearance the yard owners were granted a protective order to give them time to come to an agreement with the bank.
Just after Christmas the bank rejected the last offer put to them. The yard owners have been working through a debt solution company to help them get an agreement with the bank. The whole family is reliant on the yard for their incomes and none of them work outside the family business. They have engaged with the bank since day one and although they are in arrears they always paid what they could off the loans, they didn’t just ignore the issues.
There are a number of us in the yard that want to help them in anyway we can. We each pay them a fair amount each a month and we don’t want the yard to close.

Is there anything we can do to help at this stage of the situation?

Is there anyone they can turn to now for help to help them get a deal with the bank?

Is there any chance the bank will listen to them considering it is a family business and sole source of income for the family?

Any advice greatly appreciated.
 

Brendan Burgess

Founder
Messages
37,462
they have managed to keep the business viable to date.
It doesn't sound viable, and it's not the role of the bank to keep an unviable business going by just not collecting the mortgage.

From your description it sounds as if there is a business which generates very little income occupying a property which could be put to a better economic use.

The yard went on the market briefly priced at 25% of the mortgage
The horsey set usually has plenty of money. Could a few of the clients not get together and buy the yard at 25% of the mortgage? Then rent it back to the family.

The borrower can go bankrupt and wipe out the balance.

Just after Christmas the bank rejected the last offer put to them.
What offer was put to them?

Does the family have a family home separate from the yard? Is there equity in that?

The yard owners have been working through a debt solution company to help them get an agreement with the bank.
What is a "Debt Solutions Company"? Is it a personal insolvency practitioner? Or is it someone who advertises in the tabloids that they can get all your debts written off?
 

RETIRED2017

Frequent Poster
Messages
772
And it is OK for the horsey set with plenty of money to come together and arrange Bankrutcys and push bad debt over onto other peoples Mortgages, I think we are coming close to understanding the real reason why Mortgage interest rates are higher in Ireland than other EU countries, I don't think you will find advice like the above being given to people outside of Ireland,
 
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Brendan Burgess

Founder
Messages
37,462
I don't think you will find advice like the above being given to people outside of Ireland,
On the contrary, business reorganisations, pre-pack administrations and bankruptcies are common in the UK and elsewhere.

They are particularly useful when you have a business which is profitable before debt servicing which KC says that this company is.

Brendan
 

Jim Stafford

Frequent Poster
Messages
447
Is there any chance the bank will listen to them considering it is a family business and sole source of income for the family?
Little chance. However, a court might listen!

They should consult with a PIP to examine if the family home is "tied" into the same folio as the livery yard. If it is, and if the family home is "modest" they may be able to do Section 115A PIA and reduce the debt on the family home (i.e. lets say the home itself and 1/2 acre plot) to the market value of the house.. If they can achieve this, the livery yard may be more unattractive to purchasers, as the family are still living on the lands. Their hand could be further strengthened if they could demonstrate that they need the income of the yard to pay the reduced mortgage etc.

Jim Stafford
 
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