Slattery says Friends First threatened to sue for $10m
Published 04/12/2012 | 18:01
BUSINESSMAN Domhnal Slattery's claims Friends First Life Assurance Company threatened to pursue him for almost US$10m (€7.6m) under an alleged guarantee over funds issued to buy a hotel in Washington DC.
In a Commercial Court action which opened today, Mr Slattery, Ailesbury Road, Ballsbridge, Dublin 4 - who is CEO of Avolon Airspace Ltd - claims Friends First threatened to sue him and also moved to discredit and undermine him with Avolon shareholders and others. This was after he refused to consent to rectification of a July 2009 deed which allegedly limited his liability to Friends First under a guarantee.
He claims the July 2009 deed provides Friends First with limited recourse to him arising from his alleged guarantee of March 2008 related to a promissory note via which Friends First advanced about US$9.5m to Claret Capital Holdings LLC, a Delaware company, towards purchase of the St Regis Hotel in Washington.
In his proceedings, he is seeking declarations from the court including that he is not personally indebted to friends First Life assurance Company Ltd in the sum of US$9.9m plus interest, and that the defendant company is not entitled to demand payment of US$9.9m from Mr Slattery.
He is also seeking a declaration that Friends First recourse to Mr Slattery in respect of an liability under a deed of pledge or a joint and several guarantee in March 2008 is strictly limited to the value of 256 shares in a company called Jetbird Ltd, an aviation firm launched by Mr Slattery.
Mr Slattery is further seeking damages for alleged breaches of confidence, privacy and duty.
The claims are denied.
Mr Slattery, represented by Brian O'Moore SC and Eoin McCullough SC, claims that since April 2011 solicitors for the defendant company have made a number of threats to take legal proceedings against him.
It is claimed Friends First said they would not sue Mr Slattery if he consented to the rectification of a Deed of Pledge dated July 2009 and or paid friends First US$ 9.9m, which it claims he owes them under the the terms of a written guarantee.
Both the Deed of Pledge and the separate guarantee are commercial contracts which were agreed and entered into between Mr Slattery and friends First as part of a wider commercial transaction. Despite the threats, no action was taken against Mr Slattery, the court heard.
Mr Slattery claims the situation has led to nervousness among those with whom he does business and could have "devastating financial consequences" for him.
The case relates to a US$14.05m loan advanced by Friends First to Claret Capital in March 2008 via a promissory note to fund the purchase of the St Regis Hotel in Washington DC.
The action before Mr Justice Brian McGovern continues and is expected to take some days.