AIB appoints receiver to properties in insolvent Zoe
Published 23/01/2010 | 05:00
ALLIED Irish Bank has appointed a receiver over a large portfolio of properties owned by developer Liam Carroll.
AIB had sought to appoint a receiver over five companies within Mr Carroll's insolvent Zoe Group after it was refused court protection last year.
Yesterday, High Court judge Mr Justice Peter Kelly described a decision by AIB not to sell the properties at present as wise given the "wretched" state of the property market.
Earlier this week, Judge Kelly expressed "astonishment" that AIB handed out €550m loans to five companies formerly controlled by Mr Carroll with only a letter and the deposit of title deeds as security.
But yesterday he said that while this was "an unusual security given the extraordinary amount of money loaned", it was additional to other securities.
These charges are via equitable mortgages created on the basis of undertakings by solicitors for the Zoe companies to hold the title deeds of the properties in trust for AIB. All title deeds have been lodged with the bank.
Judge Kelly said yesterday that there had been an intention to create legal mortgages, which had not proven possible.
However, the bank was prepared to make the loans available under this arrangement which, while less satisfactory than a legal mortgage, was not devoid of legal effect, provided the title to the properties was good, he said.
Receiver William G O'Riordan now has the power to act as a landlord of the mostly Dublin-based properties, manage the companies' interest in them, receive rents and enter leases.
He is not entitled, at this stage, to enter into possession of or to sell the properties.
Judge Kelly appointed the receiver after making orders that the loans were "well-charged" -- well-secured -- over the various properties.
The judge rejected suggestions by the liquidator of two other companies in the Zoe group, Vantive Holdings and Morsten Investments, that the receiver was not entitled to receive rents purely for the benefit of AIB alone and not other creditors.
AIB had brought its action against five Zoe companies -- Danninger, Eppo Developments, Fabrizia Developments, Oze Construction and North Quay Investments Ltd.
Counsel for the companies indicated they would not oppose the making of the well-charging orders or the appointment of a receiver.