Tony O’Reilly sold off €110m of assets to pay down debts, court told
Published 26/05/2014 | 17:22
BUSINESSMAN Tony O'Reilly - who being sued by AIB for €22m - told the bank earlier this month he had disposed of assets valued at more than US $150m (€110m) since 2011 and used all of the proceeds to reduce borrowings.
AIB alleges only €307,737 of the €110m was used to discharge its debt and the €307,737 represented the sale proceeds of a property owned by Mr O'Reilly which the bank requested be sold.
Mr O'Reilly has told AIB he would sell his entire Castlemartin estate in Co Kildare consisting of "circa 750 acres of the finest stud land in Ireland".
He had put also on the market Shorecliffe House mews, cottage and lands in Glandore, Cork, and would agree a programme for disposal of certain shares in Independent News & Media (INM) on which AIB's debt was secured.
His unencumbered assets include a shareholding in Fitzwilton Ltd controlled by Gilhome Ltd and he said he would discuss with the other shareholder the issue of a sale of part or all of the company, according to documents put before the court.
Other unencumbered assets included a cottage outside Castlemartin; two pensions of €1m each, of which only one could be cashed; and contents, valued at between €500,000 to €1m, of houses owned by him.
A church on the Castlemartin estate, including a graveyard where his parents and two grandchildren are buried, had been excluded for that reason from security given to banks but would be included in the Castlemartin sale, it was stated.
State-owned AIB has brought proceedings seeking summary judgment for €22m against Mr O'Reilly, Lissadell, Lyfordf Cay, Nassau, Bahamas; and for €18.6m and €4.1m against two of his investment vehicles, Indexia Holdings and Brookside Investments Ltd. The bank had previously expressed dissatisfaction with proposals to clear those debts.
Brookside owns Mr O'Reilly's estate in Glandore while Indexia holds his near 5pc stake in INM and shares of Providence Resources.
Despite lengthy negotiations from 2010, the defendants failed to make any substantial commitment to repay those facilities, it was claimed.
Mr O'Reilly's representative Bernard Somers had advised on May 14 that €2m cash was not available to make an upfront payment in partial reduction of the debt, as AIB had demanded, the bank said.
AIB had demanded repayment by May 12 and it extended the deadline to May 13 when it got a proposed timeline for disposal of some assets.
AIB gave until 1pm on May 14 to expand on the proposals but a further proposal was unacceptable.
It offered to defer proceedings if €2m was paid upfront and the defendants agreed to take immediate steps to dispose of assets but this was not forthcoming.
Mr Justice Peter Kelly has agreed to fast-track the case to the High Court's big business division, the Commercial Court.
Bernard Dunleavy, for Mr O'Reilly, said his side accepted the monies were borrowed and repayable and had agreed with AIB the case would be fast-tracked but then be adjourned for a brief period.
Michael Collins SC, for AIB, said the bank considered the case urgent but was prepared to allow a short time to the defendants. He said "every possible opportunity" had been afforded to reach an accommodation.
Given the bank's agreement, the judge said he would adjourn the application to June 23.
The proceedings arise from loans made to Mr O'Reilly on dates from March 2009 to fund personal investments, repay a director's loan and refinance an existing loan. The loans were repayable on dates in 2010 and 2012.
Security for the loans included mortgages over the Gate Lodge and Caretakers Lodge at Castlemartin Stud; 240 acres at Castlemartin and Corbally, Kilcullen, Co Kildare; Hill House, Holy Cross and adjoining lands at Glandore, Co Cork; Shorecliffe House and lands at Glandore; and share mortgages over shares in INM.