Lynch advisers estimated his worth at €48m, court is told
Published 16/03/2011 | 05:00
Above, Philip Lynch and his wife Eileen arriving at the High Court yesterday. Inset, one of the couple's daughters, Judith Whelan, who gave evidence yesterday. Courtpix
LEADING businessman Philip Lynch's advisers told Allied Irish Banks he was worth €48m before the bank gave out a €25m loan for his family's property investment, a court heard yesterday.
However, his daughter, Judith Whelan, who signed the loan documents on behalf of the family, denied that the bank had sought this net-worth statement in case it might need to pursue her father personally for the loan.
The family are claiming that AIB lent them the money for a 2007 property investment in Waterford on the basis that it could take back the site if they were unable to repay the loan -- and that it could not pursue them individually to pay back the €25m.
The bank denies this claim.
In court yesterday, Ms Whelan said she understood that the statement of worth was provided to AIB in 2007 to show that her father could pay the significant interest on the €25m loan for two years.
Ms Whelan's claim that her father had insisted that he would only get involved in the deal if the loan was made on a non-recourse basis was challenged in court.
Mr Lynch is chief executive of One51, an investment company with stakes in companies such as National Toll Roads.
Ms Whelan, who was being cross-examined by Paul Sreenan SC, for LK Shields Solicitors, said her father had raised the non-recourse issue in two phone conversations with her on February 7, 2007, the day before the loan deal was signed.
One conversation lasted less than two minutes while the second lasted 34 seconds.
The action has been taken by Philip and Eileen Lynch and their children -- Judith, Philippa, Therese and Paul -- who are seeking declarations from the court that they are not personally indebted to AIB for the €25.3m sum.
The case arises from an agreement between developer Gerry Conlan and the Lynchs in relation to the 2006 purchase of 86 acres at Kilbarry, Waterford, which they intended to develop as a retail park.
The €25.3m loan from Allied Irish Banks was advanced for that deal in 2007. The lands, which were rezoned but never developed, are now said to be worth only about €4m.
The action is also against two firms of solicitors -- LK Shields and Matheson Ormsby Prentice. The family claim that LK Shields, represented their interests in relation to the AIB loan and they are entitled to an indemnity against it and/or Matheson Ormsby Prentice, which represented Mr Conlan's interest, in relation to any claim by AIB against them.
The defendants have denied the claims against them.
Separate proceedings by AIB seeking a €25.3m judgment against Mr Conlan, of Bridalwood House, Forenaughts, Naas, Co Kildare, will be heard later.
The case continues in the High Court.