Mellon firm in breach of loan terms 'has bank support'
A company controlled by social entrepreneur Niall Mellon is in breach of the terms of its loan from Anglo Irish Bank and has had a court judgment against it for failing to pay a €180,000 bill, according to accounts filed with the Companies Registration Office.
Businessman Niall Mellon is best known for his Mellon Township Charity, which builds homes for poor families in South Africa.
Accounts filed for Knockraboo Developments, a company he set up in 2003, showed it had debts of €39m -- the bulk of which is an Anglo Irish Bank loan that fell due at the end of 2009.
Despite failing to pay the loan, the company believes it has the ongoing support of its banks and can therefore continue to exist as a going concern.
The company's independent auditors Leinster Partnership state that Knockraboo is in breach of the terms of the loan from Anglo Irish Bank in their report on the 2008 accounts. The abridged accounts for 2008 state that the loan was due to be transferred to NAMA in 2010.
The company said its balance sheet has negative assets of €24.3m, including a writedown of €16m on loans owed to it by related companies.
Knockraboo is the vehicle for a planned residential development at Goatstown in south Dublin.
The company paid €50m for the site in 2003 but the accounts value the work in progress at €15m and note that planning permission for the site has been refused because it may be needed by the National Roads Authority to build a new road.
Development is stalled as a result of the planning difficulties and because of that, and the generally drop in demand for development land, the company's auditors say that it is difficult to estimate the value of the property.
The independent auditors report revealed that a court judgment against the company for €181,832 was issued in May 2010 in relation to work completed and invoiced in 2009 by architects Henry J Lyons.
The auditors said the company does not dispute the amount but said that the bill had yet to be paid when the accounts were signed off on September 15.
The loan from Anglo Irish Bank is secured against the seven-and-a-half acre site in Goatstown and by a guarantee from Mr Mellon, according to the accounts.