Final terms of €25m Lynch loan gave AIB full recourse, court is told
The final terms of a €25m loan from AIB to buy development lands in Waterford gave the bank full recourse to businessman Philip Lynch and his family for repayment of that amount, the Commercial Court was told yesterday.
Ronan McLoughlin, of Matheson Ormsby Prentice solicitors (MOP), denied that a message left by him for another solicitor just hours before the loan facility was signed indicated it involved no recourse to the Lynch family.
Mr McLoughlin said he dealt in 2006 and 2007 with conveyancing aspects of the transaction in which 86 acres at Kilbarry, Co Waterford, were acquired by developer Gerry Conlan and the Lynch family.
The terms of the final loan facility letter issued by AIB on February 8, 2007, and signed that same day by the Lynch family, gave the bank full recourse to Mr Lynch, his wife Eileen and their four children for the €25m, Mr McLoughlin said. He was giving evidence in the continuing action by the Lynch family aimed at preventing AIB pursuing them over the €25m loan which, they claim, they always understood was non-recourse.
Their proceedings are against AIB, MOP and LK Shields. AIB denies the loan was non-recourse and is counterclaiming for €25m judgment orders against the Lynch family.
Both law firms deny negligence or that the family is entitled to an indemnity from them in relation to any judgment secured by AIB. Evidence on behalf of the Lynch family has concluded and AIB has not called evidence. Cross-examined by Michael McDowell, counsel for the Lynch family, Mr McLoughlin said he was informed by Derek O'Shea of AIB at 6.40pm on February 7, 2007, the bank was removing a special condition in the loan facility letter which had confined its recourse to Philip Lynch and Mr Conlan.
He understood AIB was taking this step because it wanted to have recourse to all borrowers.
Earlier, Mr Justice Michael Peart refused an application by the family to dismiss AIB's counterclaim on grounds there was no evidence to show the €25m was due and owing. AIB had argued there was such evidence.
The judge said he understood the family was unhappy with AIB's decision not to call evidence, including from Mr O'Shea, but they had not established a basis to dismiss the counterclaim at this stage. The counterclaim will be dealt with later. The case continues.