Business Irish

Tuesday 20 February 2018

Thomas Molloy: Tawdry excesses of the boom now being laid bare

Thomas Molloy

Thomas Molloy

IT'S been a bumper few months for high-profile court cases, giving us glimpses of how business was really done during the boom.

Occasionally comical, sometimes bitter, always engrossing, these cases shine a bright light on boom-time business practices that look haphazard and breathtakingly naive when viewed in the cold light of a London courtroom.

Funnily enough, it always seems to be a London courtroom.

Here in Ireland, where the wheels of justice creak even slower than those across the water, we have yet to see the sort of cases involving public figures that are now becoming common in the English capital.

The past few months have seen cases involving Allied Irish, Bank of Ireland and Anglo Irish – the three riders of the Celtic Apocalypse.

Belfast developer Paddy McKillen's action against the fabulously wealthy and reclusive Barclay twins ended in defeat for Mr McKillen, while AIB's action against fraudster Achilleas Kallakis and Bank of Ireland's case against former solicitor Brian O'Donnell continued in the courts this week with fascinating evidence from both Mr Kallakis and Mr O'Donnell.

Mr McKillen's case against the Barclay twins generated juicy stories, from a spat between Mr McKillen and Frederick Barclay in the Ritz Hotel after the Belfast developer was ticked off for not wearing a tie; to text messages from Anglo chief executive Mike Aynsley to Mr McKillen, which read like the sort of thing two teenagers would send one another rather than communications between the chief executive of a state-owned bank and one of the bank's debtors.

The Kallakis trial, which includes tales of visits by AIB executives to yachts in Monte Carlo, as well as weekends in Cannes and Mauritius as Mr Kallakis thanked bank officials for allowing him to borrow staggering sums despite a conviction for fraud, is possibly even more colourful.

But for sheer bitterness, nothing can quite beat the O'Donnell case, which basically boils down to the question of where Mr O'Donnell and his wife Mary now live.

In a sense, the O'Donnells are a sort of Irish upper middle-class everyman. He is a solicitor and she is a doctor.

Like so many middle-class couples, they used their inflated salaries to somehow borrow and borrow until eventually the two of them had managed to borrow around €1bn – or about one-40th of all the tax collected in a typical year here in Ireland.

Like many other power couples who were once wealthy, the couple has been remarkably generous to their children – something that is usually a charming trait but drives the banks nuts, for understandable reasons.


That money has funded an extraordinary lifestyle – beautiful houses in Dublin and London as well as dozens of lovely investment buildings from Ailesbury Road to a 12-storey office block close to the White House in Washington; the O'Donnells see themselves as property investors rather than developers and adopted an investment strategy of only buying top-notch properties in top locations.

The swish houses were accompanied by plush cars, although these are slowly disappearing; the county registrar for Galway seized the family Daimler and a Morgan in April.

The current legal case hinges on the O'Donnells' efforts to declare bankruptcy in the UK and avoid the same fate here where they would be effectively barred from earning a penny for 12 years.

Bank of Ireland wants the couple to be declared bankrupt here in Ireland.

Despite their bankruptcy, they are not living in squalor. The couple rent their London home from a Swiss-registered trust belonging to their children and have to make do with digs that extend to three kitchens, two studies, a dining-room, library, media room and eight bedrooms.

While the lifestyles of the rich can be endlessly diverting for the rest of us, it is likely that London's lawyers are likely to be the biggest winners as Ireland's former plutocrats squabble in public over who lent what to whom.

Irish Independent

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