Personal guarantees caused downfall as market crashed
Published 13/10/2012 | 05:00
THE seeds of the downfall of Sean Dunne's property empire were sown in a huge array of personal guarantees he gave to the banks in a bid to secure loans.
The Carlow-born developer is under severe pressure to repay debts totalling almost €250m after first NAMA, and then Ulster Bank, called in a series of loans earlier this year.
NAMA got a High Court order for the repayment of €185m, while Ulster Bank got an order compelling Mr Dunne to repay €164m.
Details of personal guarantees Mr Dunne gave to the banks were outlined in a statement of affairs he prepared for NAMA.
The Irish Independent has seen a copy of the documentation.The records reveal in detail how time and again Mr Dunne personally guaranteed huge loans while the property market was falling.
The personal guarantees given by Mr Dunne included:
• Jury's Hotel, Ballsbridge, Dublin A €154m personal guarantee was given to Ulster Bank for borrowings in connection with the hotel site.
• Berkeley Court Hotel, Ballsbridge, Dublin
A €27.4m personal guarantee, covering 30pc of borrowings and 100pc of interest, was given to Ulster Bank.
• Hume House in Ballsbridge and five other Dublin properties
Mr Dunne gave a guarantee to Bank of Ireland on September 15, 2008, which left him with a maximum exposure of €72.5m on borrowings of €174.6m. Hume House was purchased in 2006 for €130m.
• 76 Sir John Rogerson's Quay, Dublin Mr Dunne provided a guarantee of €10m to Bank of Scotland (Ireland).
• Former Zed Candy site in Kilcock, Co Kildare
Mr Dunne provided a €35m guarantee to Irish Nationwide on October 14, 2007. The loan was later written down to just €5m by the building society. NAMA placed his firm Waterside Kilcock Property Company in receivership last December.
• Donnybrook Mall, Dublin
A personal guarantee was given by Mr Dunne to Ulster Bank to cover the interest on a €15m loan. A receiver was later appointed to Padholme, the Dunne company which held the property.
• Church Avenue, Sandymount, Dublin A letter of guarantee, dated July 23, 2007, was provided for up to €6m to AIB.
• The Charlesland development, Greystones, Co Wicklow
A full recourse guarantee was given by Mr Dunne, worth €4.78m in respect of stock and lands. A further guarantee of €500,000 was given on bonds.
Documents detail how Mr Dunne also provided personal guarantees for his children's property borrowings.
These included a €1m guarantee in respect of rental properties owned by Steven Dunne; €1.2m in respect of John Dunne; and €796,000 in connection with rental property owned by his daughter Elaine.
A further €1m guarantee was given for the borrowings of a partnership made up of the three siblings.