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Wednesday 1 October 2014

Developer's wife disputes property claims in NAMA bid for €22m 'debt'

Tim Healy

Published 03/05/2014 | 02:30

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Property developer John Flynn and his American wife Leona (Lee) Flynn pictured leaving court following the opening day of a High Court action.

THE American wife of Irish property developer John Flynn is asking the Commercial Court to declare she has no interest in a Dublin office park as part of NAMA's bid to recover a €22m debt owed by the family.

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Leona (Lee) Flynn, who lives in Palm Beach, Florida, for most of the year, denies NAMA's claim that the transfer of her 10pc interest in Belfield Office Park to her husband never took place, or if it did it is an unenforceable agreement.

The Flynns dispute a demand for repayment of €22m issued by NAMA over loans made by Anglo Irish Bank to members of the family related to the Belfield property.

It is claimed by NAMA that Mrs Flynn is seeking to suggest she is no longer the owner of the Belfield shareholding because it is the only one of her four Irish properties over which she has a personal liability in relation to the loan on it.

Her interests in the other three – the Hermitage and Blackrock Medical Clinics, in Dublin, and the former Smurfit HQ in Beaver Row, Dublin – are ring-fenced and are non-recourse or non-personal liabilities. Mrs Flynn strongly denies NAMA's claims and the court heard she transferred the Belfield interest to her husband in 2008 on accountant's advice because new tax laws were about to kick in in the US and she wanted to minimise her liability there.

In her proceedings against the NAMA company, National Asset Loan Management (NALM), Mrs Flynn wants Mr Justice Brian Cregan to rule she has no beneficial interest in Belfield. NAMA denies her claims and has brought a counterclaim against her, her husband John Senior, John Flynn junior, James Flynn and Elaine Flynn, seeking judgment for €22m.

DEBT

NAMA says Mrs Flynn is part of a "Flynn connection", which had "significant debt" spread across AIB, IBRC and EBS facilities which were taken over by NAMA.

In its counterclaim, NAMA denies Mrs Flynn divested herself of her interest in the Belfield property. It also says that if Mrs Flynn did reach an agreement with Anglo permitting her to divest her interest in the property as she alleges, any such agreement is unenforceable.

The Flynns claim NAMA's "unique" powers are being applied unlawfully, disproportionately and in a biased manner.

The Flynns' accountant, Stephen O'Halloran, insisted the transfer of the Belfield property interest had taken place in order to minimise Mrs Flynn's tax liability in the US.

Rossa Fanning, for NAMA, put it to Mr O'Halloran that the document purporting to effect the transfer of Belfield had been backdated to January 2008.

However, Michael McDowell objected, saying this was an attempt to suggest his client had being trying to defraud a state agency, NAMA.

Mr O'Halloran told Mr Fanning he accepted consent, for the transfer was never formally obtained from Anglo because the paperwork had not been completed. But he insisted the decision to transfer took place at a meeting in September 2007 and that the paperwork dated the transfer as January 2008.

On re-examination by Mr McDowell, Mr O'Halloran said nothing improper had happened in relation to the documentation, nor was there any attempt to create a false impression. The hearing resumes next week.

Irish Independent

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