Saturday 24 February 2018

Mansfield claims BoSI caused €206m collapse


Jim Mansfield at his Citywest complex in 2008. Photo: Tony Gavin
Jim Mansfield at his Citywest complex in 2008. Photo: Tony Gavin

HOTELIER Jim Mansfield is opposing a claim by Bank of Scotland for summary judgment orders for €206m against him arising from his personal guarantees of debts of various companies.

Among Mr Mansfield's claims is that the bank's failure to honour an alleged agreement to loan more money for the completion of the Citywest convention centre led to the collapse of the Mansfield group.

However, Paul Gallagher, for the bank, said the claim that this "magnificent empire" collapsed because of the bank's refusal to provide additional funds in 2008 was "extraordinary" and unsupported either by documents or the conduct of the Mansfield side.

At the time, he said, most of the Mansfield group loans were in "serious and repeated default" with more than €200m owed to the bank.

He said the bank rejected claims by the hotelier that there was some form of legal contract for the funding of the convention centre, arising from an encounter with the then-head of Bank of Scotland Ireland in the bank's car park at St Stephen's Green in Dublin in August 2008.

Mr Mansfield and his son James have said in affidavits Mark Duffy told them they could go ahead with building as the bank would fund it. Bank of Scotland has argued it was always the case that any funding proposal would have to be formally approved and this approval was not forthcoming.

Mr Gallagher told the court that, by 2008, the bank had supported the Mansfield group "through thick and thin". He said it could not be argued, because the bank refused to provide any more funding for the convention centre, it was not entitled to summary judgment.

Mr Mansfield, represented by Patrick Leonard, contends he has an arguable defence to the bank's claim requiring the court to refuse summary judgment and allow the matter go to a full hearing.

Mr Mansfield has alleged that business was conducted between him and the bank via verbal agreements on funding, with the paperwork being put in place later.

Mr Justice Kelly queried the claim that the bank had agreed in 2008 to provide a loan of "between €17m to €20m" to complete the convention centre without any specification of what interest or other terms applied.

He said his experience of bank managers "of old" was that they looked for the "three Cs" -- capital, collateral and character -- when considering whether to make loans, to ensure a borrower had funds and could be trusted.

He remarked: "If they stuck with that, this country might not be in the position it is now."

In response, Mr Leonard said he accepted the form of borrowing in this case might not be the norm, but it was what had happened here.

The hearing of the bank's application concluded at the Commercial Court yesterday before Mr Justice Peter Kelly, who reserved judgment.

Irish Independent

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