Friday 9 December 2016

Skyline is the limit for bank's rich customers

Emmet Oliver

Published 13/01/2010 | 05:00

IT'S the best address in New York and one of the premier shopping streets in the world.

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Opulent Fifth Avenue has emerged as the favourite playground of Anglo Irish Bank's wealthy customers, based on an examination of loans issued by the bank over the past three years.

Fifth Avenue in Manhattan is famous as the home of luxury retail stores such as Tiffany & Co, Cartier and Louis Vuitton.

Anglo's customers, many of them originally from Ireland, appear to have a liking for Manhattan, with even Sean FitzPatrick's son David (who still works with the bank) availing of a loan from the bank for a Manhattan condo.

An Irish Independent investigation of Anglo's loan book in the US discloses that over the past three years, and further back, the bank has lent potentially hundreds of millions of dollars to Irish people and consortia to buy properties in Manhattan. Unfortunately for some of these borrowers, prices for luxury apartments in Manhattan have slumped since the financial crisis.

An enormous amount of auctioneers, financiers, oil and gas executives, property developers and members of the horse racing industry have been given loans by Anglo Irish over recent years to dabble in the New York real estate market.

While famous part-time New York property residents such as Bono borrowed from Bank of Ireland, other purchasers found credit easier to obtain from Anglo Irish Bank, which is believed to be considering selling its US loan book.

Jockey Mick Kinane, for example, was given a loan by the bank for $1.4m (€966,000) in January 2007 for an apartment at 225 Fifth Avenue, one of the most prime real estate locations in the city.

Kinane, who retired last year, was provided with a variable (or adjustable) rate mortgage by the bank, with Anglo retaining the sole rights to any charges on the property.

Kinane is not the only prominent member of the racing fraternity to make an Anglo-supported investment in New York. Chairwoman of Goffs, the bloodstock auction house, Eimear Mulhern is recorded as taking out a loan with Anglo in March 2007.

The daughter of former Taoiseach Charles Haughey is recorded as taking out a loan worth $1.42m (€980,000) in this period, although this loan amount was reduced to $1.1m (€760,000) in an agreement in 2009 and a company called Meadow Court was inserted as the new borrower. The deal was signed off by Pat Walsh, a senior Anglo Irish executive, documents show.

In September 2007, Ciaran Haughey is recorded as borrowing $765,810 (€529,000) for a condo on Fifth Avenue, and the bank's loan document imposed strict loan default conditions on Mr Haughey.

Another customer Anglo may regret getting involved with is Gerry McCaughey, who in October took court action against Anglo in relation to hotel deals in the Big Apple. Mr McCaughey and some other investors said they were seeking their money back and damages.

Apartment

According to examination of Anglo's US loans, Mr McCaughey, who at one point was the chairman of the Dublin Dockland Development Authority, purchased an apartment at West 48th Street using a loan from Anglo worth $854,250 (€590,000). The loan documents make it clear the apartment loan will operate with an adjustable rate mortgage.

One of the biggest apartment purchases was made by the Shelbourne Hotel partnership, which took out a $7.9m (€5.4m) loan in December 2008, just before Anglo Irish was nationalised. The loan was executed by John Joseph Sweeney, the hotel and oil entrepreneur.

John O'Dolan, a west of Ireland property developer famous for buying large tracts of land in Dubai, was also a regular purchaser of apartments in New York using loan finance from Anglo. He passed away last year.

Martin Blake, a leading beef processor and energy sector executive, was also a borrower of Anglo for New York property and in 2007 he was advanced more than $1m (€690,000) for a property on West 48th Street. Again the loans were advanced to Mr Blake in 2007, just as the property slump in the US and Ireland was beginning.

Irish Independent

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