Lynch had been warned against doing land deal with a 'gambler'
Published 17/03/2011 | 05:00
Philip Lynch's long-time friend and business associate Pascal Taggart warned him about the dangers of getting involved in a Waterford land deal with Kildare property developer Jerry Conlan.
"It sounds like a great deal," he said.
"But if you play with Jerry Conlan long enough, you will lose because he is a gambler", the court was told.
But Mr Lynch already knew Mr Conlan well.
They lived fairly close to each other in Kildare, but more importantly they had a business relationship, as Mr Conlan had invited Mr Lynch to become a director of Harlequin Healthcare, the company he controls that owns the Mount Carmel hospital in Dublin.
More recently, Mr Conlan hit the headlines as one of the famous "Maple Ten" -- the group of businessmen Anglo Irish Bank's former chief executive, David Drumm, rounded up to purchase Sean Quinn's 10pc of the bank in a last desperate attempt to stop it from imploding.
While Mr Lynch, who was said to have been "fluid" about whether he would actually go ahead with the €25m land deal right up to the last minute, knew the investment could set his family up nicely and possibly yield a profit of as much as €20m within a few years.
Whether it was a gamble or not, he went ahead with it.
The Lynch family claim that AIB, the bank that Mr Conlan arranged the loan with on their behalf, had lent the money on the basis that if they couldn't repay the loan it could take over the Waterford site to clear what they owed.
The bank couldn't pursue them individually for it.
The bank disputes this and the family are now challenging AIB in court as well as the two firms of solicitors who provided advice on the deal, LK Shields to the Lynch family and Matheson Ormsby Prentice to Mr Conlan.
Mr Lynch's daughter, Judith Whelan, who signed the loan documents on behalf of her parents and siblings, has spent six days explaining how the family came to believe that they didn't have to worry about the bank ever calling on them to repay the loans.
Anyway, the only person in the Lynch family with the wherewithal to make the repayments on that loan was her father, she said.
When pressed on some of the details of the bank loan, Paul Sreenan SC, for the family's solicitors, LK Shields, described her recall as "very, very hazy".
He also suggested there was an element of "reconstruction or construction" in her account of these events. She denied both statements.
It is a high-stakes case for the Lynch family, for AIB and the two firms of solicitors who each have an army of legal advisers to fight their corner.
Of the about 50 people in Court Nine each day, around 40 are solicitors or barristers, including about six senior counsel.
The Lynch family are all expected to take the stand in the next week to give their version of events in the court battle to protect them from a €25m debt on a failed property investment.