Fresh legal woes for Reilly over nursing home
Bid to force minister and other investors to sell property that has saddled them with €1.9m debt
Published 16/12/2012 | 05:00
THE Health Minister James Reilly, is facing fresh legal action over a nursing home investment that has saddled him with a €1.9m debt.
The latest legal proceedings against the minister and other investors in the Tipperary nursing home were registered in the High Court last Thursday.
The action was taken by Dr Dillip Jondhale, a doctor who operates the nursing home business with his wife and who is one of the original investors in the building with Dr Reilly.
It is understood it is intended to force the minister and other investors to sell the troubled property, which is now embroiled in three separate cases of litigation.
However, informed sources say attempts to sell the building have been hampered by the litigation and no realistic offers have been forthcoming.
Prior to taking up office, the minister gave power of attorney to his solicitor, thereby granting his lawyer the ability to dispose of his interest in the nursing home in March last year but attempts to sell it have been unsuccessful.
The latest legal action could further hamper the minister's efforts to repay the €1.9m debt after he was named in Stubbs Gazette as a debt defaulter in July.
At the time of his naming in Stubbs, the minister said the complex litigation hanging over the nursing home meant that the investors could not secure the funds to repay the €1.9m. He said he hoped to settle the debt "within months" however, the litigation has also hampered the investors' attempts to sell the property at a realistic price.
Failure to repay the debt could result in bankruptcy proceedings. The debt stems from a nursing home in Greenhills in Carrick-on-Suir which Dr Reilly and 12 others came together to build in 2001, funded by their cash and a bank loan.
Five of the investors – including the minister and a Fine Gael councillor Anne Devitt – were liable for the bank loans. The other eight were not and were due to be bought out of the investment in 2011. By then, the nursing home was embroiled in litigation over alleged unpaid rent and a dispute over the lease.
The minister explained in the Dail that the litigation meant that he and other investors couldn't secure the funds for the buy-out, which led to a judgment for €1.9m being registered against him and four others in July.
The investors include Anne Devitt, a Fine Gael councillor, and doctors, solicitors, an engineer and an IT expert, who put in their own money on top of bank borrowings.
In a further embarrassment for Dr Reilly, the nursing home – which is operated by Dr Jondhale and his wife – has been criticised in inspection reports by health watchdog, Hiqa.
However, Dr Reilly has emphasised that was never involved in the running of the nursing home but was an investor in the building.