Saturday 21 October 2017

Asset stripping case against O'Donnells transfers to Commercial Court

Tim Healy

A BANK'S action against solicitor Brian O'Donnell and members of his family over alleged asset stripping has been transferred to the Commercial Court.

Bank of Ireland (BOI) has brought the action against Mr O'Donnell, his wife Mary Patricia and two adult sons alleging conspiracy to put in place a "blatant" asset-stripping scheme involving properties valued at €124m and stg£130m.



Today, Mr Justice Peter Kelly said he would transfer the case into the commercial list, subject to the outcome of challenges by sons Bruce and Blake O'Donnell, of Gorse Hill, Vico Road, Killiney, to the court's jurisdiction to hear the matter.



The judge rejected arguments the bank had delayed in bringing the fraud proceedings or was required to have put the O'Donnell's on notice of its application last Friday to be allowed serve short notice on them of the applicaiton for transfer.



Counsel for Brian and Mary Patricia O'Donnell, now living at Barton Street, London, had sought time to consider whether there was delay by the bank but the judge said he was satisfied there was no delay on grounds including that various matters only emerged in documents provided by Mr O'Donnell earlier this month.



Ross Maguire SC, for the sons, had argued his side should have been given notice of the Friday application and said the fact it was made ex parte (one side ony represented) with the bank alleging a "blatant fraud" was an abuse of the court's process.



Mr Maguire also said the properties involved were subject to senior loans and mortgages worth more than their valuations.



Cian Ferriter SC, for BOI, said he was very surprised at the suggestion any application made in open court was an abuse of process and he rejected that insinuation. Barristers cannot sign off on fraud claims unless they are satisfied there is evidence to support those, he added.



Mr Justice Kelly said it was normal to draw the court's attention to what a claim is about.



The judge also noted undertakings provided today on behalf of Bruce and Blake O'Donnell not to take steps in relation to the alleged asset-stripping conspiracy pending the outcome of their challenge to the court's jurisdiction.



The matter has been returned to next October when the court will address the jursdictional point.



The bank is alleging fraud against the four over what it has described as "a blatant fraudulent scheme" carefully put in place in recent months in the teeth of the bank's efforts to execute a €75m judgment obtained against Brian and Mary Patricia O'Donnell.



This "Byzantine" scheme was intended to put assets beyond the bank's reach and the extent of the fraud only became clear during the judgment enforcement process, particularly during the court examination of Brian O'Donnell and from discovery of documents, Mr Ferriter said.



The latest action by the bank against the O'Donnell's arises from matters that emerged in the bank's continuing proceedings aimed at enforcing the €75m judgment granted in December 2011 over unpaid loans related mainly to property investments.



The bank has moved as a result of matters which emerged in the court examination of Mr O'Donnell over recent months about his assets and income and as a result of documents discovered from the couple.



The fraud proceedings mainly relate to Mr and Mrs O'Donnell's interest in two substantial properties in London - Columbus Courtyard, Canary Wharf, and Westferry Circus - and what the bank describes as "significant management income" being earned from Columbus Courtyard and another property, Chalet Hermine, Courcheval, France.



Among various claims, the bank contends Mr O'Donnell was not truthful when examined in court about certain alleged trusts which the bank claims are a sham.



Mr Ferriter said, from documents discovered last month, the bank could see a series of steps that seemed to have the effect of moving assets through British Virgin Islands companies to Blake O'Donnell and involving companies whose directors were Blake and Bruce. The effect of this was to put assets out of the estate of their parents, he said.





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