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€300m surge in property legal actions

THE Commercial Court, Ireland's big business court, received new claims in excess of €300m in less than two hours yesterday morning.

The fast-track court, set up to resolve corporate disputes in a speedy fashion, has fallen prey to a record surge in multi-million euro debt recovery actions triggered by a collapse in Ireland's property market.

The court, which became operative in 2004, was -- at its peak last year -- dealing with new applications at a rate of 10 to 15 per week.

Yesterday, there was a record 30 new applications, with the court attempting to deal with an unprecedented 97 cases over two days.

Legal experts have warned of a new wave of actions against borrowers with high levels of personal debt, loan guarantors and solicitors alleged to have failed to perform legal undertakings. Almost 100 actions were listed before the court yesterday including:

  • A €37m action against hotelier Hugh O'Regan over personal borrowing and guarantees;
  • An €11m action by EBS against former Fianna Fail councillor Ger Killally and others;
  • A €114m lawsuit over the former Irish Steel site at Haulbowline in Cork;
  • A €6.4m action by ACC Bank against three solicitors over undertakings given in relation to development loans;
  • A €9.2m judgment against a Limerick property developer and
  • A €15.2m action against AIB Bank.

As the EBS launched an €11m action against Mr Killally, the former running mate of Taoiseach Brian Cowen was simultaneously convicted of failing to file income tax returns at Edenderry District Court.

Mr Killally, who is bankrupt, did not appear in the Four Courts to defend the EBS action and was not represented in the case relating to his failure to make the returns in the tax-year 2000-2001.

District Court Judge Gerard Haughton gave him six months to pay a fine of €1,500.

In the Commercial Court, Mr Killally and his former business partner and Offaly GAA manager Richard Connor are being sued -- along with others -- over their alleged failure to repay an €11m loan.

The EBS claims it advanced the loan in 2006 for a hotel and spa development at Edenderry, Co Offaly, and to refinance existing facilities advanced to companies.

Judge Kelly, who was forced for the first time to split the weekly motions list over two days because of its size, also warned of the increasing pressures on the court.

"This is a court with limited resources that is daily placed under greater and greater strain," said Judge Kelly.

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The single largest monetary claim was yesterday brought by an English company which is claiming €114m damages against three other firms over alleged breaches of agreements to clear contaminated materials from the former Irish Steel plant site at Haulbowline Island in Cork.

In separate proceedings, the State is being sued over its alleged failure to pay more than €8m arising from the clean-up.

A Limerick man agreed to a summary judgment order for €9.2m being made against him over his failure to repay a development loan.


Michael McManus, Roxboro, Ballysheedy, had stated he had no answer to the claim and chose not to defend the proceedings brought by KBC Bank Ireland plc, formerly IIB Bank.

The court also accepted onto its list a €6.4m claim by ACC Bank against three solicitors over undertakings given in relation to development loans.

And in a rare action against a bank, the court heard a woman is seeking court orders compelling Allied Irish Banks (AIB) to release its claims over 26 Dublin properties said to be worth €15.2m.

Patricia Cullen claims she is entitled to have the properties transferred to her under a settlement of family law proceedings with her husband, businessman Bryan Cullen.

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