Hard as nails, good as gold: Michael O'Flynn the man
Sarah McCabe profiles the Cork developer who took on the might of Blackstone, in the High Court, and won
Published 17/08/2014 | 02:30
What on earth could motivate one man to take on a US corporate giant?
To pour his personal wealth into the fight - a personal wealth that, while not insignificant, pales in comparison to the $80bn arsenal of his opponent?
Where, how, it is hard to tell. But Michael O'Flynn found the motivation.
With bruises of tiredness under his eyes, he emerged from the Four Courts victorious this week - an outcome few expected.
Perhaps it comes down to nothing more than a deep-burning need to uphold his reputation.
The Cork developer is a local boy through and through, and the locals love him.
"You don't mess with him, that's for sure. But he is a good business man," said one Cork agent who spoke on the condition that he not be named. "He built damn good houses and he was good for Cork."
Born in 1957, O'Flynn grew up in the Kilcrea countryside on his family's farm. He took it over years ago and still lives there with wife Joan.
They run a bloodstock farm on the 100 or so acres, which has produced some prize-winning studs over the years. He has three children and recently welcomed his first grandchild.
It is a phrase that gets bandied about too often, but he is a self-made man.
His family weren't builders. He entered the game in his very early twenties in 1978. He started out small, building houses, scratching together finance.
Boosted by baby boomers, in the days when the concept of developer was still relatively unknown, business boomed. He built swathes of houses across Cork and massive industrial and retail developments like the Ballincollig Shopping Centre.
The lure of foreign shores proved too tempting to bear and he expanded overseas, moving into the UK in 1985. There he built massive student housing developments under the brand Victoria Hall. In 2006 he extended into Germany, where he now owns commercial and retail units as well as more student accommodation.
But it's Cork apartment block Elysian Tower for which he remains best known. Seventeen stories of glass and steel, it beat Liberty Hall to the title of Ireland's tallest building.
It must have been immensely satisfying to build that kind of landmark in his own home town. Attendees at the opening night of the Elysian, who included rugby star Ronan O'Gara and the Foreign Affairs Minister of the day, Micheal Martin, provide an insight into just how well-connected O'Flynn is.
But you don't build an empire like that without being a shrewd tactician. He bargains a hard deal. He was one of the few developers who didn't personally guarantee his companies' loans, meaning he held on to the contents of his bank account when property values sank and the O'Flynn group ran into trouble.
This shrewd nature was very evident in the High Court in recent weeks. He was lawyered to the hilt for the showdown with Blackstone subsidiary Carbon Finance, his legal team outnumbering Carbon's two to one. The fees, one imagines, must be astronomical. Michael Cush SC, one of the top barristers in the country, led his team. That kind of skill comes at a price.
Though he didn't opt for a Magic Circle solicitor firm, as Blackstone chose to with Dublin-based Arthur Cox - a firm that had previously done work for the O'Flynn group. His solicitors instead came from a mid-sized Cork firm, South Mall-based PJ O'Driscoll. (His lawyers in the UK, however, Eversheds, are decidedly more Magic Circle).
O'Flynn is no stranger to the courtroom and has been in and out of the High Court over the years for all kinds of disputes. He famously sued ex-Fine Gael TD Lucinda Creighton for defamation following remarks she made about him in a speech at the Magill Summer School in 2010. The case was settled out of court. He was also sued by his own brother at one point, over a planning dispute at the family farm.
He was exemplary at Nama, sources say. Perhaps that's why the bad debt manager paid him a salary of €200,000 in the four years his loans were under its control, one of only three Nama borrowers granted such salaries.
He contributed constructively to the process of selling his loans. The relationship between the two is understood to have been reasonably good before Blackstone subsidiary Carbon Finance launched its unexpected bid for the return of personal loans that triggered last week's court battle.
Some put his determination to fight Blackstone down to this - anger at having cooperated for so long, only to face losing it all anyway.
Others say it was O'Flynn's good business practices that created his current problem in the first place. Cleverly- selected European assets like student housing mean his group takes in a whopping €75m a year in rental income. It was that income that brought the private equity firms swarming like bees to honey when loans attached to the O'Flynn group went up for sale. If the assets had not been performing so well, there would not be as much interest in gaining control of them.
But after all this background explanation, it's still difficult to pin down exactly what motivated Michael O'Flynn to try and take on the might of Blackstone.
He faces an upward climb, despite last week's victory. The private equity firm still owns his group's loans, worth €1.8bn. Blackstone is the creditor, the O'Flynn group is the debtor. There is no avoiding that hard fact.
One wonders whether it is possible for the two parties to work together, given the viciousness of their court battle. O'Flynn, for his part, has said that he will try to work constructively with Blackstone.
Whether it is possible to counsel what has become a very unhappy marriage back to health remains to be seen.