Anglo plans work on hotel at centre of court case
Published 18/06/2010 | 05:00
NATIONALISED lender Anglo Irish Bank is to have restoration work carried out on its controversial New York hotel, the Beekman Tower, which is the subject of a bitter legal dispute.
The bank declined to say how much money would be spent on the work, which is to be carried out by the US construction company Basonas. However, it said it planned to vigorously defend the legal action.
The work involves 'facade restoration' of the landmark building, which is near the United Nations headquarters in mid-town Manhattan.
According to Basonas, the works consists of "replication of decorative cast concrete, face brick replacement, structural steel reinforcement and masonry pointing''. The bank denied that the work represented any kind of overall refurbishment.
Last November, leading businessman Gerard McCaughey accused Anglo Irish Bank of acting fraudulently when it used money from wealthy Irish investors to buy two hotels in New York, one of them being the Beekman.
Mr McCaughey, the founder of Century Homes, accused the bank of engaging in fraudulent or reckless concealment and of fraudulent misrepresentation or conspiracy.
The High Court was told that the bank was being sued by 21 "high net-worth" Irish-based private investors for $23m (€15.58m) over their investment in a fund to buy and renovate the Beekman and another hotel, the Eastgate Tower.
The Irish Independent reported in March that Anglo was planning to use a hotel-management company to advise on options relating to the two hotels. The bank would not comment on this at the time.
It is understood that Anglo wants to get the litigation out of the way before pressing ahead with any options for the hotels.
Anglo set up a fund through its New York office to buy and renovate the Beekman Tower and Eastgate Tower Hotels in Manhattan.
Many of the investors are existing clients of Anglo Irish Bank Private Banking. A number of investors financed their investment by way of credit facilities provided by the bank.
The Beekman was designated with landmark status in 1998 which means that it has to be maintained to a certain standard and cannot be radically altered.