Thursday 27 July 2017

Solicitors claim Anglo misled them on loan guarantees

Tim Healy

A SOLICITOR has consented to €21m of summary judgment orders that were sought against him by the nationalised Anglo Irish Bank over personal guarantees on loans.

The guarantees related to €165m in unpaid loans to companies and partnerships linked to the Fordmount property group.

Three other solicitors are opposing similar orders against them. Among the grounds for their opposition is their claim that senior Anglo executives gave assurances that the guarantees were "empty" and mere "form-filling exercises" which would never be relied upon by the bank.

The Anglo Irish action is against Dermot O'Donovan, Michael Sherry, Aidan Frawley and Thomas Dalton, who are all partners in the firm Dermot G. O'Donovan & Partners, of Mallow Street, Limerick.

All four had previously indicated to the bank that they were unable to pay the €21m.

Mr Justice Peter Kelly was told yesterday that Mr Dalton was consenting to summary judgment against him for €21,460,077 and the judge then made that order.

However, counsel for the other three told the Commercial Court that while Anglo was insisting that his clients' defence was "a cod" and "contrived", it had failed to produce any evidence to contradict claims from the three solicitors that they had been told the guarantees would never be relied upon.

For example, Bernard Dunleavy BL said, there was no evidence from Anglo that it had told developer Michael Daly, a co-guarantor with the three, that the bank wanted guarantees to stay in place for compliance reasons but that these would never be relied upon.

While his clients acknowledged they had not behaved as prudent solicitors, they swore that their version of events was truthful, counsel added.

Fraud

The three also claim that Anglo acted negligently and in breach of its duty in advancing loans at a time when it either knew or suspected that there was a fraud "or something akin to it" going on in the Fordmount property group.

Mr Dunleavy said his clients were not involved in that fraud and Anglo had acknowledged as much, but to date it had failed to provide them with the report of an investigation ordered by it into that fraud.

Mr Justice Peter Kelly will continue hearing the case today.

The case arises from unpaid loans of €165m advanced by Anglo to three companies in the Fordham property group and two partnerships to buy lands and buildings in Limerick city and county for development.

Irish Independent

Promoted articles

Editor's Choice

Also in Irish News