AIB to pursue €25m loan Conlan took with Lynchs
AIB will move to pursue property developer Gerry Conlan over the €25m loan he took out with businessman Philip Lynch and his family next week. Mr Conlan organised the loan for the 86-acre Co Waterford site they purchased in 2007 with plans for a shopping and residential development.
During the Lynch family's case against AIB and two firms of solicitors -- Matheson Ormsby Prentice and LK Shields -- the court heard Mr Conlan has "no money."
Mr Lynch, his wife Eileen, their daughters Judith, Therese and Phillipa and son Paul, are jointly and severally liable to repay this loan and will pick up the entire cost of it if Mr Conlan cannot pay his share.
Mr Conlan had loans of €313m from AIB and stopped making repayments on the €25m loan for the Waterford site some time ago.
The bank will deal with his liability for the loan and can proceed to obtain judgments against the Lynch family members to have it fully repaid, plus interest, when the case returns to court on December 16.
AIB exceeded its own limits to its individual borrowers in lending the Co Kildare property developer more than €300m. Mr Conlan has given AIB personal guarantees amounting to €127.5m against his loans.
In his judgment this week, Judge Michael Peart said the extent of Mr Conlan's indebtedness to the bank, which was unknown to the Lynch family when they took the €25m loan in 2007, was partly the reason why AIB ensured the entire family could be held liable.
Mr Conlan wasn't called as a witness in the Lynch family's case and Judge Peart took the view this was because himself and Mr Lynch, who were business associates and knew each other over a long period of time, had fallen out.
The fact that Mr Conlan, or any of his associates, wasn't called put the Lynchs "under a possible disadvantage" he says, because the Kildare property developer was the person who dealt with the bank loan.
At the height of the property boom, Mr Conlan was one of Ireland's most successful developers. His biggest coup was the sale of the 400-acre Millennium Park site in Naas, Co Kildare in 2006 for €320m he owned with another local developer, Dermot O'Rourke.
It was the most expensive deal ever completed in Ireland yet just months later Mr Conlan needed to bring Mr Lynch into the Waterford deal because AIB wouldn't lend him any more money.
As well as developing property, Mr Conlan has built up a private hospital empire that includes Mount Carmel Hospital in Dublin, St Joseph's in Sligo and Aut Even in Kilkenny.
He is also one of the so-called Maple 10 group of investors rounded up by former Anglo boss, David Drumm in a last ditch effort to save the bank. He is co-operating with the Director of Corporate Enforcement on this matter.