ACC sues solicitors for €5.75m
Published 01/02/2011 | 05:00
ACC Bank has sued a firm of solicitors for €5.75m over their alleged failure to ensure it had proper security over a loan for a hotel in Leitrim.
The case is against Denis M McDowell, John Paul McDowell and Breen JF Purcell, practising as McDowell Purcell Solicitors, The Capel Building, Dublin, over the loan for the hotel at Dromahair. They are denying the claims. The proceedings were transferred to the Commercial Court yesterday by Mr Justice Peter Kelly.
The action arises from a loan of €5.25m advanced by ACC in 2004 to the Abbey Hotel Co-Ownership of 13 borrowers. The bank alleges the Abbey Hotel traded badly and the operator had failed to pay rent due. The operator is insolvent and in voluntary liquidation.
By June 2010, the bank claims it became clear further payments were not going to be made and it instructed its solicitors to review the security held over the borrowings.
It claims the review indicated there was a failure by the defendant solicitors, allegedly acting for the bank on the legal requirements for the loan, to take security over a sinking fund into which the hotel operator had made payments.