Solicitors not able to repay €80m Anglo loan
FOUR solicitors have stepped down as partners at a prominent law firm after running up millions in personal bank debt through exposure to a failed property company.
The four -- Dermot O'Donovan, Michael Sherry, Adrian Frawley and Thomas Dalton -- resigned as partners at Limerick-based Dermot G O'Donovan solicitors in the past six months.
They owe Anglo Irish Bank a total of more than €80m through their investment in the failed Fordmount property group, which built Limerick city's iconic 13-storey Riverpoint building close to the Shannon Bridge after personally guaranteeing loans.
Their involvement in the development forced the firm to pull out of the running as a legal adviser to NAMA last year. New filings at the Companies Office show Mr Dalton resigned as a partner in June 2010 after consenting to judgments of €21.4m against him by the bank. He has since left the firm.
The other three stepped down as partners at the end of last year, just days before Anglo Irish Bank secured judgments of more than €65m against them, but are still working as full-time solicitors at the firm -- which employs 25 people.
It is understood that their decisions to step down were taken in the best interests of the law firm, its staff and clients.
Dermot G O'Donovan Solicitors has also reregistered its business name following the departure of the partners.
The four solicitors, all with addresses in Limerick, have told the now nationalised Anglo Irish Bank they are unable to repay such sums.
But it is understood the property company has significant assets including hotels, houses and retail units and the proceeds from their sale could eventually be used to repay some of the debt.
They became exposed to the debt because they gave personal guarantees to the bank for their borrowings.
In proceedings last year, they argued against the summary judgments against them, claiming they had been told by former Fordmount managing director Frank Daly the guarantees over loans would never be relied upon. They also claimed Mr Daly had access to more than €650m.
The proceedings arose from unpaid loans of more than €165m given by Anglo to three companies in the Fordham property group, and two partnerships, to buy land and buildings around Limerick city and county for development.
Mr Daly has also alleged the four solicitors were involved in some of the deals and had given guarantees but wanted their identities kept secret.
He has already consented to a judgment of more than €86.5m entered against him by the bank.
The judgment order was granted by Mr Justice Peter Kelly in December last -- it was the biggest entered against an individual in the history of the Commercial Court.
In his defence to the bank's proceedings, Mr Daly claimed he was a "favoured developer" in the region, with easy access to senior figures in Anglo including the disgraced former chairman Sean FitzPatrick and ex-chief executive David Drumm.
The Fordmount companies spent more than €300m on development projects in the region plus an additional €100m in Germany.