Solicitors in €63m Anglo case accused of 'far-fetched' defence ploy
THREE solicitors being pursued by Anglo Irish Bank for €63m over personal guarantees on €165m have put forward a "far-fetched" defence to the bank's claim, the Commercial Court heard yesterday.
Those "incredible" claims include that senior Anglo executives gave assurances their guarantees would never be relied upon, Maurice Collins, for the bank, told the court.
But the solicitors' counsel, Bernard Dunleavy, said it would not help the court in this case to rely on the "general probabilities" as to how "normal" bank managers would behave.
It appeared to have been "normal practice" for Anglo to extend liability of €21m each to his clients without anyone in the bank so much as lifting the phone to them concerning their guarantees, counsel said.
Mr Justice Peter Kelly has reserved judgment on Anglo's application for €21.4m summary judgment orders against Dermot O'Donovan, Michael Sherry and Aidan Frawley, all partners in the Limerick-based firm Dermot G. O'Donovan & Partners.
The application arises over personal guarantees provided by the solicitors related to €165m loans made to companies and partnerships linked to the Limerick-based Fordmount property group. A fourth partner in the O'Donovan firm, Thomas Dalton, consented on Tuesday to summary €21.4m judgment against him.
Anglo has brought separate summary judgment proceedings for €86m against Michael Daly, the managing director of the Fordmount group, but that case has been sent to a full hearing after another judge ruled Mr Daly had an arguable defence on grounds including senior Anglo executives told him his guarantees over loans would never be relied upon.
Mr Collins, for Anglo, yesterday denied the solicitors' claims the bank had continued to advance monies to the Fordmount group despite knowing or suspecting there was fraud or misconduct of the affairs of the group. The solicitors claim they had no knowledge or involvement in the alleged fraud or misconduct and the bank exposed them to liabilities.
Mr Collins said Anglo had asked the firm Cooney Carey to review the Fordmount group's finances in the third quarter of 2008 and it was only after that firm made its report in June 2009 any issue of fraud arose. No monies beyond small sums were loaned to the group after that and a receiver was appointed in December 2009.