Sunday 25 September 2016

New York court move paves way for Flynn action here

Published 24/12/2015 | 02:30

Mr Flynn and the other defendants had accused Anglo Irish Bank, now IBRC, of having deliberately altered interest rates on loans, resulting in overcharges of at least €8m.
Mr Flynn and the other defendants had accused Anglo Irish Bank, now IBRC, of having deliberately altered interest rates on loans, resulting in overcharges of at least €8m.

A New York legal action taken by property developer John Flynn against Irish Bank Resolution Corporation (IBRC) and other defendants including KPMG's US unit, has been formally dismissed "on consent".

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The move paves the way for Mr Flynn to pursue action against some of the defendants in the Irish courts if he so wishes.

Mr Flynn, who lives in Florida, was responsible for the development of much of the regenerated Smithfield area in Dublin. In 2013, he and other plaintiffs launched a lawsuit against IBRC, Nama, KPMG and defendants including the former Anglo Irish Bank chief operations officer, Tiarnan O'Mahoney; Brendan McDonagh, the chief executive of Nama; and Mike Aynsley, the former chief executive of IBRC.

Mr O'Mahoney is currently serving a three-year sentence after being found guilty last year on counts including conspiracy to falsify bank records and conspiring to defraud the Revenue Commissioners.

He's set to appeal those convictions in January.

Mr Flynn and the other defendants had accused Anglo Irish Bank, now IBRC, of having deliberately altered interest rates on loans, resulting in overcharges of at least €8m.

The overcharging was alleged to have occurred in relation to €150m of Anglo loans that were used to buy or develop property in Ireland, Britain, and the United States.

The plaintiffs claimed that Anglo overcharged interest on loans, misrepresented the incorrect charging to arrangement fees and the risks involved in acquiring loans, and misrepresented the suitability of the loans for the plaintiffs' investment purposes.

Mr Flynn and other plaintiffs had accused IBRC of continuing the overcharging.

Both IBRC and Nama reject the claims and were prepared to fully defend the New York court action.

But the action against IBRC in New York was dismissed this week on consent. IBRC was granted bankruptcy protection in the United States two years ago. Lawyers for Mr Flynn and other defendants told the New York court this month that their action had been stayed because of that bankruptcy protection. Last year in Delaware, Mr Flynn had challenged that decision to grant bankruptcy protection in the US, but he later agreed in conjunction with IBRC special liquidators to drop the appeal.

The judge assigned to the case in New York said that while IBRC had been afforded protection from litigation as a result of its bankruptcy, there was no reason why proceedings should not be continuing against other named defendants in the case taken by Mr Flynn.

The action against KPMG's US unit was also dismissed on consent, but without prejudice to any claim made against KPMG's Irish arm.

The New York court dismissed the action against all other defendants on the grounds of 'forum non conveniens' - the basis that a more appropriate forum than the New York court is available.

That was done without prejudice to the filing of a new action against the same defendants on the same claims in the Irish courts, according to the US court this week.

Irish Independent

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