Five banks lining up to recover funds from solicitor
FIVE banks owed up to €50m by solicitor Michael Lynn have applied to the High Court to have their mortgage loans registered.
In the first major sign that there will be a potential scramble amongst the banks to secure priority on the loans owed to them by the lawyer-cum-property developer, Bank of Scotland (Ireland) yesterday sought permission from the High Court to vary an original court order freezing his assets, so that they could "urgently" register some six mortgages they granted to Mr Lynn.
IIB Bank, which claimed it has "a significant number of properties" mortgaged to Mr Lynn, said it was in an identical position to Bank of Scotland, whilst First Active plc, Allied Irish Bank and ACC Bank also moved to have their charges over properties registered.
Frozen
Mr Lynn, practising as Capel Law, is alleged to have taken out multiple mortgages on several properties with a number of major Irish banks. His accounts have been frozen; he has been ordered to disclose a full list of his accounts and assets; and he has agreed not to practise.
Yesterday, it emerged that the high-profile solicitor, whose practise has been shut down by the Law Society, has arranged with his new legal team to have a "forensic" accountant assist in "clarifying" his accounts.
However, it will be at least two more weeks before the full extent of the solicitor's liabilities become clear, as Mr Lynn has been given that period to complete an affidavit containing that information and a list of properties.
The liabilities are estimated as at least €26m and may be as much as €50m.
Yesterday, Mr Lynn attended the High Court supported by his wife, Brid Murphy.
The couple held hands throughout the 10-minute hearing as Mr Lynn's barrister told High Court President, Mr Justice Richard Johnson, that he "can't say" how many properties are involved.
A figure of 105 properties had previously been mentioned, including some 30 or 40 properties overseas.
Last week, the Law Society's Regulation of Practice Committee told the High Court that a report of an investigation, by an authorised officer with the society, "disclosed acts of dishonesty" by Mr Lynn, in relation to client monies.
Solicitors' account regulations prohibit payments out of client accounts for the purpose of a solicitor's personal transactions.
Some further light on the monies owed may emerge at the High Court on Thursday, when Bank of Scotland Ireland Ltd and other banks will apply to vary the court order regarding Mr Lynn.
Patrick Hanratty SC, for Bank of Scotland, said he wanted to move that application urgently because, if the six mortgages in his client's case were registered, there would be an issue about what priority they would have on Mr Lynn's list of liabilities.
Mr Justice Johnson said all of the banks should give the lists of the properties involved to the Law Society.
Paul Burns SC, for Mr Lynn, said his client was drafting an affidavit setting out a list of the properties involved, but the list was not yet complete.
Mr Lynn was willing to co-operate with the society but required access to his files, currently in the possession of the society, to draft the list, counsel said.
Shane Murphy SC, for the Law Society, said the society was prepared to agree to an adjournment of the proceedings for two weeks to allow matters be put in train.
The judge said the adjournment was for the purpose of completing the matter.
He also yesterday continued orders freezing accounts in the name of Mr Lynn and various companies associated with him; Capel Law; Overseas Property Law; Kendar Holdings Ltd; and Proper T Capel Ltd.
- Dearbhail McDonald Legal Affairs Correspondent
