FitzPatrick company got new loan on day Anglo nationalised
Lenihan unaware of last-minute deal
Published 22/07/2010 | 05:00
ANGLO Irish Bank signed off on a multi-million euro loan extension for a foreign property company co-owned by its disgraced former chief executive Sean FitzPatrick on the same day it was taken into state ownership.
The bank topped up a €14.6m loan with a further €2.6m on January 21, 2009 -- the day legislation nationalising the troubled lender was enacted, the Irish Independent has learned.
Records reveal the company subsequently drew down almost €17m of the €17.2m Anglo made available.
Some of the money was used for the purchase of a plush €10.25m villa on the French Riviera and €450,000 in real estate agent fees.
However, it is not yet known what the rest of the money was spent on.
The increased loan facility was given to SCI Saint Roch, a property rental company in the south of France co-owned by Mr FitzPatrick and property developer and corporate financier Angela Cavendish. The revelation comes less than a fortnight after Mr FitzPatrick was declared bankrupt with liabilities of almost €150m.
A spokesman for Finance Minister Brian Lenihan last night said he was completely unaware of the loan extension to Mr FitzPatrick's company.
Regulations obliging Anglo to seek Mr Lenihan's approval for any substantive changes to the terms of directors' loans did not come into force until six months after the bank was nationalised.
A spokesman for Anglo declined to comment, citing customer confidentiality.
Mr FitzPatrick's company bought the exclusive property on Avenue Bellevue in Saint Jean Cap Ferrat from an Algerian-born radiologist in May 2007. But within a year-and-a-half, Mr FitzPatrick was having difficulty servicing his portion of the loan.
A letter written by Ms Cavendish -- seen by the Irish Independent -- said SCI Saint Roch entered refinancing negotiations with Anglo after Mr FitzPatrick had come "under pressure".
As part of the deal, Anglo agreed, in a letter dated January 21, 2009, to increase its lending to the company, provided Ms Cavendish took full liability for the loans.
The property developer, who went into partnership with Mr FitzPatrick after meeting him on the board of the Dublin Docklands Development Authority, is now trying to sell the villa to repay the bank.
In correspondence, she said auctioneering firm Savills had valued the property at €20m.
French companies office records show Mr FitzPatrick resigned from the board of SCI Saint Roch on March 12 this year, a day before he first went to the High Court in an effort to get protection from creditors.
He stepped down at an extraordinary general meeting convened at Charlotte Quay in Dublin, but still retained a 50pc stake in the company.
However, it is unclear whether Mr FitzPatrick's creditors can pursue the stake as he had an agreement to eventually pass these shares to Ms Cavendish in return for her guaranteeing the company's loans.
As a result of this agreement, Mr FitzPatrick told creditors he expected to make just €500,000 from the sale of the villa.
The villa purchase was one of two property investments Mr FitzPatrick made in France.
The other, an investment in a Parisian property fund, performed badly and is now worth just 55pc of his initial stake.
Mr FitzPatrick asked the High Court to declare him bankrupt on July 12 after Anglo objected to his proposals for a settlement with creditors.
His assets were estimated to be worth around €50m, around €100m less than what he owed his creditors.