Bank secures €19m judgment against businessmen
Published 10/05/2011 | 05:00
TWO Clare businessmen have consented to €19.5m judgment orders against them over unpaid loans from Zurich Bank to buy land for development, the Commercial Court has heard.
Noel Connellan, Shanaway Road, Ennis, and Sean Lyne, Cahercalla More, Golf Links Road, Ennis, along with Friends First Managed Pension Funds, were advanced €18m by Zurich in October 2007 to buy two sites at Loreto Road, Lisdarn, Cavan, for the purpose of commercial development.
The loan was increased to €18,945,000 in 2009 and the total was to be repaid in one payment on April 11, 2010.
The court heard yesterday that the bank was not proceeding against Friends First.
The money was not repaid by the two men on the due date and a formal demand for repayment was issued on January 12 with the amount owing at that stage standing at €19.3m.
In an affidavit, Zurich portfolio asset management solicitor Richard Murray said that last year the bank commissioned a report from planning consultants about the development of the two sites in Cavan where permission had been obtained for residential development.
The report found there was a real possibility the residential zoning might be removed by Cavan County Council, Mr Murray said.
The consultants recommended a planning application be made as soon as possible prior to any de-zoning decision. However, the two men said they would be unable to fund such an application and subsequently the bank instituted proceedings against them.
Mr Murray said the bank "exercised forbearance for a considerable period" to avoid litigation but the defendants were unable to make any meaningful settlement proposal.
Mr Justice Peter Kelly, after hearing there was consent from the two men, granted judgment orders for a total of €19.5m, including interest to date.
In another case, the judge adjourned until tomorrow an application by ACC Bank for a judgment order against Sean Flanagan, of Readstown, Summerhill, Co Meath, over loans totalling €23.3m given to him between 2002 and 2009.
The court heard that Mr Flanagan's lawyers were seeking an adjournment to consider whether they would be putting forward a defence to the bank's claim.