Rhatigan battles Goldman Sachs over Radisson Blu hotel
Companies in the Rhatigan property group claim an international equity fund is trying to get control of some of its assets including the Radisson Blu Hotel in Golden Lane, Dublin.
In Commercial Court proceedings, the Galway-based Rhatigan firms want orders restraining Beltany Property Finance Ltd from enforcing the appointment of a receiver over the hotel arising out of a letter for demand of repayment of €39.8m in loans and securities.
The case was admitted to the Commercial Court list yesterday by Judge Brian McGovern on consent between the parties.
In an affidavit, Padraic Rhatigan, a director of the firms, said the loans, originally taken out in 2007 with Ulster Bank, were sold last year to Beltany, a subsidiary of the Goldman Sachs multi-national banking group,
The loans had been restructured in 2009 when Ulster Bank took additional security in relation to non-hotel finance facilities with the result that all income from non-hotel assets in the Rhatigan group would go to pay off interest on the loans for three years.
Under the hotel ownership structure, one of the Rhatigan companies, Luxor Investments, could buy the Radisson Blu on the occurrence of certain events within seven years, expiring on December 24, 2014, Mr Rhatigan said. The hotel's operations have always been sufficient to meet interest payments and last year it recorded a profit of €2.8m, he said.
The loans were again restructured in 2013. Then, in March last year, Ulster Bank asked Rhatigans to co-operate in the sale of the firms' loans and securities to Goldman Sachs as part of the bank deleveraging its loan book.
Mr Rhatigan said he engaged in this process in the spirit of good faith and co-operation.
Last October, Ulster Bank notified Rhatigans it had agreed the sale of the loans to Beltany.
Mr Rhatigan said discussions between Rhatigans and representatives of Beltany and Goldman Sachs took place but broke down for a number of reasons, including commercial considerations, asset valuation and interpretation of restructuring facilities.
A meeting last December in London with representatives of Goldman Sachs' agents was "disheartening", Mr Rhatigan said, because it became apparent to him the banking group did not have any intention of reaching a "commercially reasonable resolution". It was simply going through certain steps because it believed it was required to do so, he said.
A few hours after that meeting, solicitors for Beltany wrote to the Rhatigans saying the hotel loan was payable unconditionally as of December 24 and the non-hotel facility was being treated as a demand loan, Mr Rhatigan said.
On December 31, the Rhatigan solicitors were informed joint receivers had been appointed over the Radisson Blu.
In the last few weeks, the Rhatigan companies had found an alternative funder to refinance the loans and as of last Tuesday this was at an advanced stage. Mr Rhatigan said the defendant was asked not to take any enforcement steps in relation to the appointment of the hotel receiver but it only agreed to a qualified undertaking.
Mr Rhatigan said the defendants' unlawful conduct has the potential for long term reputational and commercial damage to his firms and risks jeopardising the refinancing proposal.
It was clear, he said, the defendant, on acquiring the hotel loan, had been determined to take control of this asset for its own commercial benefit and had attempted to manufacture grounds for doing so.
The proposal to find an alternative funder to redeem the loans had been unreasonably dismissed by the defendant as not being "meaningful or serious", Mr Rhatigan said.
It was clear the defendant had no intention other than implementing a "pre-determined enforcement strategy" and as a result the Rhatigan side had no option but to bring proceedings, he added.