Sunday 20 August 2017

Lawyer with €800m debts accuses bank of devaluing his properties

The Fatburen building in Stockholm
A Jaguar XK parked outside the O'Donnell home yesterday

Dearbhail McDonald and Tim Healy

A HIGH-profile lawyer whose companies have bank debts of more than €800m has accused Bank of Ireland of devaluing his international property portfolio.

Solicitor and property investor Brian O'Donnell is a principal in Brian O'Donnell and Partners, one of 64 firms appointed by NAMA to its panel of potential legal advisers.

Mr O'Donnell and his wife Dr Mary Pat O'Donnell had a property portfolio once valued at more than €1bn stretching from Washington to Stockholm.

They claim a decision by Bank of Ireland to pursue them for almost €70m in unpaid property loans has affected their investments because of negative publicity.

But yesterday the bank told the Commercial Court that Mr O'Donnell wanted them to "simply not call in the money".

Agreement

In court proceedings by the bank, Mr O'Donnell claims there was a "tacit" agreement that Bank of Ireland would continue to roll up interest and support facilities until he could make the necessary sales "to regularise the position".

The couple have counterclaimed for breach of implied terms of agreement, and for reputational damage.

Paul Gardiner, counsel for BoI, argued that there was no dispute the various loans were made. There was default on those loans for more than two years -- and it would be doing no injustice to the couple to enter summary judgment, he said.

Mr Gardiner also argued that the situation was not "of unequal bargaining" power and Mr O'Donnell did not "shy away" from saying he was an expert on property transactions.

Counsel said Mr O'Donnell had reminded the court on several occasions he was involved in many property transactions which had made lots of money until more recently.

Mr Justice Peter Kelly noted that Mr O'Donnell had described himself as one of Ireland's leading corporate lawyers.

Although selected for NAMA's panel, Brian O'Donnell and Partners has not received any work to date from the agency.

The court heard that Mr O'Donnell argued the bank had assured him it would be "flexible" in relation to the facilities entered into.

But Mr Gardiner said the court had to ask what flexibility he was searching for. He said that what Mr O'Donnell wanted was that the bank should "simply not call in the money".

Mr O'Donnell's claims to have a defence under the Consumer Protection Code was also "novel", Mr Gardiner added.

If correct, it meant there had been a significant and dramatic change in banking law here without any statutory enactment, he said.

BoI is seeking the €69.5m summary judgment orders arising from various loans, including a €7.7m loan to purchase a property at Ailesbury Road, Dublin 4, and other facilities to refinance property loans with Ulster Bank and Anglo.

The bank is also seeking €42m summary judgment orders against three companies over the same loans. The three companies are GreyStoke Societe Anonyme, a Luxemburg registered company; Vico Swiss Holdings AG and Avoca Properties Ltd.

Repayments

Last December, the bank demanded repayment of the facilities and also demanded repayments under various guarantees of the couple.

The defendants contend they have raised an arguable defence on various grounds -- including the bank had acted unfairly and unreasonably, and in breach of its fiduciary duty to them, in bringing the summary judgment proceeding.

The couple claim the bank should have given them a proper opportunity to service and refinance the loan facilities.

Mr O'Donnell has alleged the bank was trying to put pressure on him and his wife to sell shares in Redicent Ltd, a property holding company whose only asset was a prime property asset, Sanctuary Buildings, Westminster, London.

The bank had loaned £26.7m (€31.2m) to Redicent under a junior loan facility which was not part of these proceedings. It was not secured on the Sanctuary Buildings property or the shares of Redicent, he said.

The case continues.

Irish Independent

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