Sean Dunne hands over control of hotel sites to banks
DEVELOPER Sean Dunne has finally lost all control of the former Jurys and Berkeley Court hotel sites in Dublin.
The developer paid €400m for the properties in Dublin's exclusive embassy belt back in 2007, at the height of the boom.
Yesterday, the banks that backed the original deal with massive loans finally took control of the hotels. Mr Dunne handed over control of the properties when the two sides settled a legal dispute ahead of a hearing in the Commercial Court.
The banks had already taken ownership of the properties in 2009. That came after Sean Dunne's original plans for a €1.5bn development of the site, including a 37-storey sky scrapper, was blocked by planning authorities.
The combination of the scheme being blocked and the wider property crash ended all hopes of making a profit on the original €400m investments.
However, under the deal agreed in 2009 the banks -- Ulster, Rabobank and Iceland's Kaupthing -- created a new company to take ownership of the sites and rented them back to Dunne's D4 Hotels business.
The deal left Mr Dunne liable for €259m under his personal guarantees of liabilities, the banks argued in court yesterday.
The plan was for Mr Dunne to eventually develop a smaller project on the site. In the meantime he continued to operate the hotels and paid rent to the lenders.
Yesterday any hopes of the second project ended. The banks told the Commercial Court that they had taken possession of the hotels following settlement of a legal dispute with Mr Dunne.
The legal case had been initiated after Mr Dunne tried to block the banks from taking control of the hotels when his company's lease ended at the start of this month.
Mr Dunne had initially refused to yield possession until outstanding issues including money owed to his companies as a rent rebate were resolved.
Banks argued that Mr Dunne had no defence to the claim for possession and had called in €295m in personal guarantees.
Yesterday, Mr Justice Peter Kelly was told of the settlement of the case when it came before the Commercial Court yesterday.
The banks have now signed a short-term letting agreement with a company called Tulane Business Management Ltd for lease of the hotels.