AIB gets €22m order against 'broke' Anthony O'Reilly
Published 24/06/2014 | 02:30
AIB has claimed that businessman Anthony O'Reilly, Ireland's former richest man, is broke.
Yesterday, AIB secured a judgment for €22m against Mr O'Reilly, who admits he owes almost €200m to his creditors.
The AIB judgment is just under 12pc of the one-time billionaire's overall personal liabilities, which now stand at €195m.
Mr O'Reilly did not dispute the AIB debt and "is hopeful" that the sale of his Castlemartin Estate in Co Kildare – described as "the jewel in the crown" – would discharge most or all of the debt owed to the state-owned lender.
He has sought a six-month court delay on the enforcement of the judgment as he wants to sell other assets in an orderly fashion.
Such a stay or postponement would prevent a series of court actions by other creditors, a move which could lower the value of those assets.
High Court judge Mr Justice Peter Kelly said he wanted time to consider the delay bid and would give his judgment on that issue on Friday. He granted a stay until Friday pending that decision.
Judgment for some €23m in total was also entered against two of the businessman’s investment vehicles.
Mr Justice Kelly was told by AIB that all three defendants “are insolvent”.
Earlier, when entering judgment, plus interest, against Mr O'Reilly and two of his companies, the judge said Mr O'Reilly deserved credit for accepting from the outset the monies were repayable.
Mr O’Reilly hopes the assets sale, including of his 750-acre Castlemartin Estate and shares in Independent Newspapers, will discharge most or all of the debt owed to AIB. Castlemartin is the key to his ability to pay off the debt, the court heard.
Mr O'Reilly previously told AIB he would sell the church and graveyard on his Castlemartin Estate where his parents and two grandchildren are buried to meet his debts to AIB, which had not taken security of the burial ground.
Mr O'Reilly had agreed with other creditors, owed some €195m, they would not move against him so as to facilitate sale of assets with the proceeds of sale to be distributed pro-rata among creditors.
If the stay is not granted, the consequences for him and two of his companies are “potentially enormous” but AIB would not suffer prejudice if a stay was granted subject to certain undertakings from his clients, his counsel said yesterday.
AIB would do better to allow the sale of Castlemartin and other assets proceed in an orderly way, he said. Expressions of interest had been received.
Michael Collins SC, for AIB, said the only reason there was a plan to sell off unencumbered assets was because the bank had taken proceedings in an effort to get the defendants to “face up” to the scale of the problem.
AIB opposed any stay and queried what was the point of it getting a judgment unless it could register and enforce that, counsel said.
Expressions of hope the sales would clear the bank’s debt were not a reason for a stay as such expressions had been a characteristic of the relationship between the bank and Mr O'Reilly over the years, he added.
While Mr Cush alleged AIB had previously agreed to an arrangement for a pro-rata distribution among creditors of a realisation of unencumbered assets, no proceedings had been taken asserting such an agreement exists, Mr Collins said.
AIB brought the proceedings against Mr O'Reilly, Lissadell, Lyfordf Cay, Nassau, Bahamas; and for €18.6m and €4.1m against two of his investment vehicles, Indexia Holdings and Brookside Investments Ltd, after expressing dissatisfaction with proposals to clear those debts.
Brookside owns his estate in Glandore, Co Cork, while Indexia holds his near 5pc stake in Independent News & Media (INM) and share of Providence Resources.
Despite lengthy negotiations from 2010, the defendants failed to make any substantial commitment to repay those facilities and Mr O'Reilly's representative Bernard Somers had said on May 14 that €2m cash was not available to meet AIB’s demand to make an upfront payment in partial reduction of the debt, the bank claimed.
The proceedings arise from loans made to Mr O’Reilly on dates from March 2009 to fund personal investments, repay a director’s loan and refinance an existing loan. The loans were repayable on dates in 2010 and 2012.
Security for the loans included mortgages over the Gate Lodge and Caretakers Lodge at Castlemartin Stud; 240 acres at Castlemartin and Corbally, Kilcullen, Co Kildare; Hill House, Holy Cross and adjoining lands at Glandore, Co Cork; Shorecliffe House and lands at Glandore; and share mortgages over shares in INM.