Businessman thought €25m land deal was without risk, court told
One51 boss Philip Lynch said it "never crossed his mind" he would have to raise money for the deal to buy a site at Kilbarry, Waterford, with property developer Gerry Conlan or to provide a personal guarantee to repay it.
It was a "no risk" transaction and Mr Conlan, who was arranging the finance with AIB for himself and the Lynch family, knew Mr Lynch would never have agreed to the loan being offered on a joint and several recourse basis that would have made his family liable to repay the entire sum, he said. Mr Conlan understood that was "a no-go area for me", Mr Lynch told the High Court yesterday.
They had discussed this while they were both in Spain in January 2007. Before the final loan letter was issued by the bank, Mr Conlan left him "in no doubt" that personal guarantees would not be an issue, he said.
At that time, Mr Conlan was a "most valued" client of AIB said to have a net worth of between €200m and €400m and AIB had got him from Anglo Irish Bank, Mr Lynch added. Yet by this time AIB wouldn't lend any more money to Mr Conlan and only agreed to the €25m loan when it learned of Mr Lynch's involvement. But Mr Lynch was unaware of this.
He told his counsel Michael McDowell, he did not believe Mr Conlan needed him at all but was instead "doing me a favour".
Mr Lynch began his evidence yesterday afternoon in the continuing action by himself, his wife Eileen and their children - Judith, Philippa, Therese and Paul -- seeking declarations they are not personally indebted to AIB for some €25.3 million sum arising from a loan facility of February 2007 related to the Waterford lands. AIB is taking separate proceedings against Mr Conlan.
Mr McDowell said businessman Paschal Taggart, a close associate of Mr Lynch's who had acted in a chairman's role advising the family about investments, would be giving evidence. Mr Taggart advised them on the Waterford deal but their business association ended in July last year. Asked by Mr McDowell if unhappy differences had arisen with Mr Taggart and did the two men fall out over the direction of the One51 group, Mr Lynch said he hadn't fallen out with Mr Taggart. "I don't fall out with people," he said. The case continues.