Thursday 14 December 2017

Syndicate of banks pursues Dunne for loan of over €163m

Tim Healy

SEAN Dunne is being pursued for more than €163m by a syndicate of banks that helped the developer take his famous punt on Ballsbridge hotels at the height of the boom.

The High Court was told yesterday that the syndicate, which contributed towards the €400m raised by Mr Dunne for two hotel investments, was enforcing personal guarantees granted by the developer.

The application was brought by Ulster Bank, which is security trustee for the syndicate, and which has asked for the case to be fast-tracked through the Commercial Court, which handles disputes for more than €1m.

The case is listed before Mr Justice Peter Kelly on Monday. Mr Dunne is now based in the US, but has entered an appearance in the action via a Dublin-based law firm, Clerkin Lynch.

Mr Dunne had planned to use the hotels' site to build a €1.5bn high-rise mixed development in Dublin 4, with a 37-storey tower as the centrepiece.

The plan was rejected in January 2009 by An Bord Pleanala and the hotels were reopened under the D4 brand.

The syndicate's case arises from loans advanced from 2005 to DCD Builders, the parent company in the Dunne group, in connection with the acquisition of Jury's Hotel.

It is alleged Mr Dunne provided personal guarantees as security for those loans.

Last January the bank, in its capacity as security trustee, demanded payment of some €260m from DCD.

When that was not paid, the bank demanded payment from Mr Dunne in February of some €163m, being the sum allegedly due under the Jury's guarantee on that date, plus interest.

The bank claims Mr Dunne has no defence to the claim. While considerable time had been spent liaising with him in an effort to see if his debt could be rescheduled or managed, that had not yielded results, and there was no option but to issue the proceedings, the bank says.

A further senior debt facility for €100m was made available to DCD in 2008 related to the Berkeley Court Hotel and site, according to the bank.

The Berkeley Court facility letter was secured by a separate Berkeley Court guarantee, but that security is not subject of the present proceedings, it says.

Proceedings

Last January, the syndicate settled proceedings brought to get possession of the hotel properties.

That case was initiated after Mr Dunne -- having been informed on December 23 that his company had to vacate the hotels on January 1 as the syndicate was not renewing short-term letting arrangements -- refused to yield possession until several outstanding issues were resolved, including a rent rebate.

Under the settlement of those proceedings, Mr Justice Kelly was told MJBCH -- a company of which Mr Dunne and Ross Connolly are directors -- had agreed to give up possession while another company Mavior -- ultimately owned by Mr Dunne's wife Gayle Killilea -- had arranged for transfer of title to the hotels' fixtures and fittings.

The syndicate said it had entered into short-term letting agreements with Tulane Business Management for lease of the hotels, expected to trade for some years, while the banks decide the best strategy for recovery of as much of their money as possible.

Irish Independent

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