Lynches win reprieve in €26m legal battle
Published 12/01/2012 | 05:00
BUSINESSMAN Philip Lynch and his family have won a reprieve to stop AIB enforcing €26m judgment orders against each of them until after their Supreme Court appeal.
The family says the judgment orders have potentially catastrophic consequences for Mr Lynch; his wife, Eileen; their daughters Judith, Philippa and Therese; and son Paul. The judgments could result in the family being declared bankrupt, the court heard, as the family's assets came nowhere near €26m.
Mr Justice Michael Peart agreed to put off the enforcement of the judgments after the family gave various undertakings that included Mr Lynch lodging €500,000 at the court within 14 days. The Lynch family also agreed not to dissipate their assets and to inform the bank of any other litigation against them.
The judge said the stay did not apply to entry or registration of the judgment, including registration as a judgment mortgage upon any property of the Lynchs but, rather, restrained the bank taking any steps -- including bankruptcy proceedings -- to enforce the judgment personally against any of the family.
He granted a further stay, pending appeal, restraining AIB from taking steps to recover legal costs against the family.
The judge also adjourned until next week the hearing of AIB's application for a similar summary judgment order against Gerry Conlon, with whom they took the €26m loan.
Mr Conlon's counsel Rossa Fanning argued that, if the Lynchs won their appeal, that would get Mr Conlon "off the hook" and he should also get a stay pending that appeal on any judgment order made against him.
The AIB loan at the centre of the case was made in February 2007 to buy development lands in Waterford, now valued between €3m and €4m.
Early last month, the judge rejected the family's arguments they were not liable to AIB and also dismissed their claims they were entitled to be indemnified for the loan by two law firms -- Matheson Ormsby Prentice Solicitors and LK Shields Solicitors -- arising from advice and information given concerning the transaction.
The judge found the family genuinely but mistakenly believed the AIB loan was a non-recourse loan, meaning the bank's recourse was confined to the lands. But he rejected their claims that AIB negligently misrepresented to them the loan was non-recourse.
He also found that while a solicitor with LK Shields wrongly advised the Lynch side the final loan facility letter was non-recourse, the scope of the firm's duty of care to the Lynchs did not extend to a point of making it liable for the loan.