Trader must repay €32m to lender
Published 05/03/2011 | 05:00
The decision to advance €32m to a shopkeeper in 2007 "seems extraordinary, even bizarre", a judge said yesterday.
Mr Justice George Bermingham ruled in the Commercial Court that Zurich Bank was entitled to recover more than €32m from Jim McConnon (40).
Mr McConnon borrowed the money to develop a shopping centre on Main Street, Castleblayney, Co Monaghan. The town is home to just 3,000 people.
He said he could not afford to repay the loans and claimed he should be absolved from the massive debt because Zurich had failed to investigate valuations carried out by estate agents CBRE.
But the judge said it had been an "overly ambitious" project. All concerned should have known from late 2006 this was "not a project free of risk", Mr Justice Birmingham said.
The centre, which is built but not fully occupied, is now valued at between €1m and €2m.
The decision is now expected to be appealed to the Supreme Court.
Mr McConnon, who did not attend yesterday's ruling, was not available for comment.
He had drawn down €32m from Zurich after two other banks had turned him down.
The speed with which the bank indicated to Mr McConnon it would give him the money -- within 24 hours of first meeting him in April 2007 -- "seems quite remarkable", the judge said.
Mr McConnon had spent €10m -- wholly financed by Allied Irish Bank -- on acquiring sites.
But the court heard AIB refused in late 2006 to provide any further funding on grounds the project was not viable.