Solicitor denies failure to tell firm of AIB 'special clause' move
Published 07/04/2011 | 05:00
SOLICITOR Ronan McLoughlin, a partner with Matheson Ormsby Prentice (MOP), denied yesterday that he had failed to tell LK Shields AIB wanted to delete a special clause that would have made Philip Lynch and Gerry Conlan personally liable to repay a €25m loan. LK Shields advised the Lynches on the deal.
This was because AIB had concerns about how it would enforce repayment of the loan.
It is alleged that by deleting that condition, AIB was entitled to pursue Mr Conlan, Mr Lynch, his wife Eileen, daughters Judith, Therese and Philippa and son Paul for the €25m.
In its proceedings against AIB, LK Shields and MOP, the Lynch family claims that the €25m loan gives AIB no recourse to them for repayment.
AIB insists the loan provides for full recourse to all borrowers and is counter-claiming for €25m judgment orders against the family. It also wants a €25m judgment against their co-investor, Gerry Conlan, in separate proceedings.
The family has alleged negligence by both legal firms concerning the Waterford transaction and is claiming indemnities from both in relation to any judgment secured by AIB. Both firms deny negligence.
Yesterday, Mr McLoughlin was cross-examined by John Gleeson, counsel for LK Shields.
Mr McLoughlin agreed that some correspondence sent by him concerning the transaction referred to his "clients" as Mr Conlan and Philip Lynch and one letter sent by him had referred to his clients as Mr Conlan, Mr Lynch "and others".
Mr McLoughlin agreed that the Lynch side paid half of a €50,000 bill sent by MOP related to the Waterford deal. That was in accordance with the terms of a co-ownership agreement for the lands, he said.
He agreed that there was "nothing documented" to indicate LK Shields was independently contacting AIB concerning the loan facility letter.
Mr Gleeson said there were 11 letters or emails between Mr McLoughlin and AIB about the deal in January and February 2007 and Mr McLoughlin himself had told the court of numerous calls between himself and AIB official Derek O'Shea.
Counsel suggested that notes by Imdat Suleiman, then a solicitor with LK Shields, of contacts he had with Mr McLoughlin indicated that Mr Suleiman believed Mr McLoughlin was dealing with matters related to the AIB loan facility letter.
Mr Gleeson put those notes to Mr McLoughlin, who disagreed that he did not tell Mr Suleiman that AIB had, on the evening of February 7, told him it had enforcement concerns about the condition in the draft loan letter confining recourse to Mr Conlan and Philip Lynch and, for that reason, had deleted that condition.
He agreed LK Shields did not get the final loan facility letter until he sent it to them about noon on February 8, 2007, with the deal to close at 3pm that day.
Mr McLoughlin believed that AIB had sent the letter to all parties and was dealing directly with the Lynches.