Banker who sold 'Belfry' in €50m suit against AIB
Former private banking manager is one of almost 350 suing AIB over its 'Belfry' funds
A former AIB private banking manager who sold property investments promoted by the lender is among a group of almost 350 people suing the bank over the funds' collapse.
Career banker Peter Tierney, who became a private banking manager with AIB in 2002, says he was strongly advised to invest in AIB's "Belfry" funds, which he funded with the help of a €75,000 interest-only "staff house loan" - secured on the title deeds of his family home - offered to him and his wife by AIB.
The Belfry funds were six products invested in UK property, promoted and sold by AIB to customers from 2001 to 2006. The first was a major success, generating a pre-tax return of almost 250pc for investors on their original 2001 investment, according to court papers filed by Tierney.
However, Belfry Funds 2 to 6 collapsed and are now the subject of a €50m lawsuit by aggrieved investors.
Last week a series of test or lead claims, including Tierney's, came before the Commercial Court where AIB and its co-defendants argued the claims were statute barred.
AIB claims that the plaintiffs, including Tierney, knew all material facts relating to the lending and leverage when they invested.
Tierney alleges that AIB categorised Belfry Funds 2, 3 and 4 on the basis that they were a 'medium-risk' product, despite what he says is the bank's stance that he knew or ought to have known that his own investment was "high-risk and leveraged".
The lawsuit is one of a series of investor actions being pursued through the courts.
Around 350 aggrieved investors issued proceedings against AIB and certain people connected to the Belfry funds, including technology entrepreneur Tony Kilduff and former head of AIB private banking John Rockett.
The investors, who are seeking up to €50m in compensation, allege negligence and breach of contract.
Last week the litigation had to be relocated to a larger court in order to accommodate members of the Belfry Investor Action Group, a pressure group set up by frustrated investors two years ago.
"This is a true David and Goliath story," said CKS Finance managing director Conor Sheahan, who is working with Belfry investors nursing losses.
"It is a deeply held financial and emotional hurt for these people," he added.
AIB declined to comment on the litigation.
Sunday Indo Business