Businessman was unable to resist 'no risk' deal, court told
Published 24/03/2011 | 05:00
Leading businessman Philip Lynch was a late convert to property development, only catching the bug at the height of the boom when he was "cut into" a €25m Waterford land deal that has turned into a nightmare for his family.
Taking the stand on the eighth day of their action against AIB and two firms of solicitors, the One51 boss, described himself as "an innocent" when it came to property development who quickly learned how developers bankrolled and leveraged sites to make money.
By 2006 he was a very wealthy man who was "good for" €50m. Over the years he had used his money to acquire properties and other investments.
His properties include: his home, Athgarvan Lodge, that is part of an 88-acre stud farm in the Curragh; two apartments, also in Kildare; two apartments in Ardoyne House in Ballsbridge, Dublin; and a penthouse apartment in Spain.
As he turned 60 he was thinking about how to share them with his family.
He was lucky to have backed away from a previous land investment that could have left him liable for debts of €129m.
It was his wife Eileen, he called "the queen", who steered him away from that mega deal. But it wasn't long before another deal came along that looked like a sure bet.
His business associate and friend, Kildare developer Gerry Conlan, was a "generous" man who wanted to "cut" Mr Lynch into a land deal in Waterford in thanks for his role as a director of his Hermitage healthcare group.
Once rezoned, the 86-acre site at Kilbarry could be developed as a retail and residential park. By quickly selling it off in parcels, Mr Conlan told Mr Lynch they could hope to make a fortune in a few years.
Mr Lynch and his wife stood to gain €21.9m while his three daughters and son would share over €4m. This would bring the total amount of gifts they had given each of their children so far to €1.6m.
He said it was a "no risk" deal, Mr Lynch explained, because the bank lent the money to them on the basis that it could take back the land if the project ran into trouble.
It could never pursue them individually to repay it. The bank disputes this and now that the land is worth just €4m is looking for each member of the family to repay their share of the debt.
Mr Lynch said he was a "cautious" man who would never expose his family to such financial pressure.
He will continue his evidence today.