Big-time player became one of bank's biggest borrowers
Published 23/04/2011 | 05:00
GERRY Conlan was one of AIB's biggest borrowers at the height of the property boom.
Evidence given to the Commercial Court, in a case businessman Philip Lynch is taking against AIB and two firms of solicitors over a €25m land deal with Mr Conlan, shows the extent of Mr Conlan's loans with the bank during the boom years.
In August 2005 he took a €25.5m loan and the following month, September, took a €48m loan toward the purchase of a retail warehouse park at Naas.
In November 2005, AIB refinanced an existing €25.5m loan, and gave Mr Conlan a new €23.5m loan to finance the purchase of the European Golf Club and three adjoining residential properties at Brittas Bay, Wicklow. By March 2006, AIB's total loans to companies connected with Mr Conlan were €148.5m.
In May 2006, Mr Conlan's personal loans rose to €62m, while company loans fell to €137.9m. Later that month, Mr Conlan's personal loans increased to €80.9m, and his companies' total loans swelled to €246m.
At that point, AIB expected these loans to be substantially reduced out of Mr Conlan's share of the €330m he and another developer received for the sale of the Millennium Park site in Naas. By then, AIB estimated Mr Conlan was worth €190m.
In January 2007, Mr Conlan's loans personal loans fell to €35m, but his companies' borrowings with AIB were then at €313m.
Mr Conlan and Mr Lynch and his family borrowed €25.3m from AIB to purchase 86 acres at Kilbarry, just outside Waterford City, in 2007. Mr Conlan stopped paying interest on the loans some time ago.
Mr Lynch is continuing to pay interest on the money, but claims AIB gave them the loan on a non-recourse basis.
It was his understanding that if they couldn't repay the money, the bank could take the land in lieu, and not pursue them individually for the rest of the money. The bank disputes this point. The case in the Commercial Court will resume with its final witness on May 3.