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Friday 23 March 2018

Businessman McCaughey defends judgement on unpaid loans from alleged Anglo Irish mis-selling

CENTURY Homes founder Gerard McCaughey is opposing summary judgment against him for some €7.7m over various unpaid property loans because of alleged mis-selling by the former Anglo Irish Bank.

Mr McCaughey contends he has an arguable defence to at least €5.5m of the amount sought and is seeking to put arrangements in place which may lead to an agreement over repayment of the remainder, the Commercial Court heard.

Patrick O'Reilly SC, with Martin Hayden SC, for Mr McCaughey, submitted yesterday he has an arguable defence to summary judgment on grounds of alleged mis-selling by Anglo, now IBRC, of the relevant funds.

Cian Ferriter SC, for IBRC, said his side disputed that Mr McCaughey had any arguable defence.

What was being advanced by Mr McCaughey was effectively a counter-claim, counsel said.  IBRC's position was that there was no arguable counter-claim and Mr McCaughey was also outside the legal time limits for bringing any such claim, he said.

In its proceedings, IBRC alleges five loan facilities were advanced to Mr McCaughey, who now lives in Manhattan Beach, California, and whose Century Homes company has been taken over by Kingspan, between September 2006 and March 2007.

IBRC says the loans were advanced for purposes including to part-fund the purchase of two units in the Rockefeller Plaza, New York, and for two investment funds - the AIAC Woogate Exchange Geared Property Fund and Peninsula Real Estate Fund ILP.

The loans were repayable on various dates in 2007 and 2008 but Mr McCaughey failed to repay, IBRC claims. It demanded repayment in April 2013 and initiated the Commercial Court proceedings last November arising from failure to repay.

IBRC previously successfully defended litigation brought against it by Mr McCaughey arising from an investment agreement between Anglo Irish Bank and 50 wealthy Irish people, including Mr McCaughey, to buy and renovate two New York hotels.

That case was treated as a 'pathfinder' action for 22 similar actions over the hotels investment. The Supreme Court last March said the investor agreement meant "you're on your own" rather than Anglo would "mind" the investors.

The Supreme Court also found no case of fraud had been made out by Mr McCaughey arising from the investment project backed by Anglo's private banking arm and involving purchase and renovation of the Beekam Tower and Eastgate Tower hotels. The investors lost their entire investment.

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