Tuesday 20 February 2018

Developer's €40m hotel plan in Montenegro runs into trouble

The UNESCO World Heritage-protected Kotor Bay
The UNESCO World Heritage-protected Kotor Bay
The Kotor Palace Hotel
Developer Seamus Ross

Dearbhail McDonald Legal Editor

DEVELOPER Seamus Ross is battling to save a planned €40m investment in Montenegro.

The landmark Kotor Palace Hotel site was sold by the Government of Montenegro to a consortium led by Mr Ross for €6.5m in 2007.

The deal, which was funded by Anglo Irish Bank after a high-profile international tender, involved a commitment by Mr Ross to invest a further €34m into the development.

The consortium also promised to submit a €4m government-performance bond to secure the deal.

But the massive investment never materialised and the bond was not fulfilled.

Mr Ross also invested a further €3.6m to buy a site in Kotor Bay from fellow Irish developer Pat Doherty's Harcourt Developments Montenegro.

Now creditors have moved to place both developments into bankruptcy and the accounts of the companies are being examined as part of a routine probe by the Authority for the Prevention of Money Laundering and Terrorist Financing (APMLTF), which inspects the accounts of companies that fall into bankruptcy.

The inspection of Mr Ross's company accounts took place last December after creditors had moved to place two developments, including the Kotor Palace Hotel, into bankruptcy.

Mr Ross, one of the so called 'Anglo Ten', whose loans have been taken over by NAMA, bought the sites in 2007.


The investments were bought for a combined sum of more than €10m with money borrowed from Anglo Irish Bank.

The sites were bought through two local companies whose shares are owned by Mr Ross's Amsterdam-registered company Menolly BV.

THE APMLTF has noted that the €6.5m used to buy the Kotor Palace site did not originate from the business accounts of LLC Kotor Palace, the registered owner of the site in which Mr Ross's Menolly BV has a 65pc share.

It says that a €10.5m loan agreed on April 20, 2007 between Menolly BV (then Tenebrio) and LLC Kotor Palace was "not realised" because Menolly BV did not execute the payment through the accounts of the local company.

Mr Ross, whose business partner on both deals is Irish developer Louis Maguire's United Entertainment Partners, did not file any objection to this report. Menolly Homes did not respond to any queries by the Irish Independent.

Mr Maguire is seeking to have both contracts rescinded.

The activities of the Irish investors has outraged locals, who had hoped that the scenic Kotor Fjord area would benefit from privatisation of state assets.

Irish Independent

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