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Saturday 23 August 2014

O'Reilly may lose estate as bank seeks to recoup €45m

Dearbhail McDonald and Thomas Molloy

Published 24/05/2014 | 02:30

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Sir Anthony O'Reilly
Sir Anthony O'Reilly
Sir Anthony O’Reilly and wife Lady O’Reilly
Castlemartin House in Co Kildare

BUSINESSMAN Sir Anthony O'Reilly is being sued for almost €45m by Allied Irish Banks – and could lose his famous Castlemartin House and Estate in Co Kildare.

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Mr O'Reilly (78), who lives in Nassau in the Bahamas, is being sued by the state-controlled lender for the debt amid claims he has "no cash" to meet its demands – despite efforts by well-known adviser Bernard Somers to broker a solution on Mr O'Reilly's behalf.

The Irish Independent has learnt that the proceedings place his Castlemartin Stud Farm in Kilcullen at risk of repossession by AIB.

The court action could spark further cases from other lenders who are also owed money by Mr O'Reilly.

US investment bank Lone Star is understood to have bought loans linked to the former billionaire from the former Anglo Irish Bank.

Fears that Lone Star might seek repayment may have prompted AIB to begin proceedings after months of talks.

On Monday, AIB will ask the Commercial Court, the big business division of the High Court, to fast-track the proceedings against Mr O'Reilly and two of his investment vehicles, Indexia Holdings and Brookside Investments.

Mr O'Reilly is being sued for €22.6m after giving personal guarantees on a loan for personal investments, according to AIB.

Cypriot-registered Indexia, the private investment vehicle that holds some of Mr O'Reilly's stake in Independent News and Media – publishers of the Irish Independent – is being sued for some €18.5m.

A further €4.1m is being sought from Brookside, an Irish-registered company with an address at Castlemartin Stud Farm.

Mr O'Reilly is the ultimate beneficiary of the share capital of Indexia and Brookside and had provided guarantees over the investment vehicles' debts.

The case marks a spectacular fall from grace for the man who was probably Ireland's first billionaire as well as a legendary rugby player and marketing genius. He became chief executive of US food company Heinz and used his income to take control of Independent Newspapers and Waterford Crystal back home in Ireland.

Mr O'Reilly expanded both companies rapidly during the great bull market which lasted from the mid-1980s to the middle of the past decade but the companies racked up high debts, which left them in serious trouble when the credit crisis began. Waterford eventually went bust.

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The former magnate had hoped to repay all of his AIB debts by selling shares in a global energy company.

The company, thought to be Landis + Gyr, was never floated and was sold instead to Toshiba by Mr O'Reilly's son Cameron for $2.3bn in 2011.

The Irish Independent has learnt that AIB moved on Mr O'Reilly and his investment vehicles earlier this month after lengthy negotiations to schedule repayment of three separate loan facilities broke down.

It is alleged that Mr Somers advised AIB that there was "no cash to make a material upfront payment".

It is understood AIB will tell the High Court that the lender offered to defer taking legal proceedings if Mr O'Reilly paid an unconditional lump sum of some €2m by mid-May.

But when that request and other conditions sought by AIB could not be met, the bank issued legal proceedings on May 16. AIB, which last night refused to comment on its legal action, alleges that Mr O'Reilly and his investment vehicles have no defence to the debt claims.

Legal firm William O'Grady solicitors is acting on his behalf, according to the website of the Courts Service.

It is understood that security for Mr O'Reilly's personal borrowings included mortgages over the Gate Lodge at Castlemartin Stud, the Caretakers Lodge at Castlemartin as well as a property at Hill House, Holy Cross and adjoining lands at Glandore, Co Cork.

Security for Indexia's borrowings included Mr O'Reilly's INM holdings and a mortgage over Castlemartin Stud. Security for Brookside included a mortgage over his holiday home Shorecliff House in Glandore.

Mr O'Reilly could not be contacted last night. However, friends of the former billionaire insisted that he was "in good spirits" despite the litigation.

"There is no mystery as to where his (O'Reilly's) money went," said one associate, adding that the businessman had spent up to €500m attempting to save Waterford Wedgwood and more than €150m protecting his stake in INM.

Irish Independent

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