IBRC settles €16 million case against ex telecoms boss Oisin Fanning
IRISH Bank Resolution Corporation (IBRC) has broadly settled legal actions against former Smart Telecom CEO Oisin Fanning and others arising from loans and guarantees, including a loan of more than €8m related to his former luxury home.
In one action, the bank sought judgment orders for some €16m against Mr Fanning and about €8m against his partner Pearl Roche, a mother of four, arising from a €8.4m loan made in 2005 to the couple related to the home, Forenaghts House, Naas, Co Kildare. The orders also related to Mr Fanning’s guarantee of a €7.25m loan made in 2006 to Outpost Properties Ltd, a subsidiary of Smart Telecom Holdings Ltd.
The couple are living in London following a 2009 order, which was made subject to several stays, granting the bank possession of Forenaghts, which is on a 24 acre estate, over failure to keep up loan repayments.
In separate proceedings, the bank sought judgment for some €8.2m against Outpost Properties Ltd, Northbrook Road, Dublin and Paul Sullivan, Ballymacarney, Kilbride, Clonee, Dublin, arising from the €7.25m loan advanced to Outpost in 2006 and Mr Sullivan's alleged guarantee of that loan. That case has also broadly settled.
On consent between the sides, both sets of proceedings were transferred to the Commercial Court yesterday but further directions will not be sought if a proposed agreement between the sides is finalised by May 29.
Yesterday's development follows a "standstill" agreement to facilitate talks between the sides after the bank initiated its proceedings for judgment last October. Those talks had since led to "broad agreement", Mr Justice Peter Kelly was told.
In a letter to IBRC's solicitors last month, solicitors for Mr Fanning said he was prepared to pay €8m cash in full settlement tn of all his loans and the personal guarantee subject to IBRC confirming it would release its charge on the Forenaughts property and another property at Citywest, plus release all guarantees.
Mr Fanning's solicitors also claimed the bank would have difficulties with both loans and guarantees if the case went to trial.
The letter alleged the bank's predecessor - Anglo Irish Bank - had in 2005 issued a "home loan" to Mr Fanning to buy 16.5million shares in Smart Telecom plc in contravention of the Consumer Credit Act.
Mr Fanning's solicitors also complained IBRC had refused an initial settlement offer of some €4m made by Mr Fanning, later increased to an €8m sum.
The solicitors said the offer was made in circumstances where the Forenaghts premises was valued between €750,000 to €1m and they hoped "sense will prevail".
Ms Roche, separately represented, said in an email while she considered it "ironic" the bank was seeking full financial details from her in circumstances where, she alleged, it had advanced a €7.9m loan to herself and Mr Fanning "without any financial documentation whatsoever", she would provide the documents sought.
In the second action, earlier correspondence between solicitors for the sides indicated the bank agreed to a postponement, or a stay on the proceedings to facilitate talks on a proposed settlement offer.
The stay was also subject to the company, Mr Fanning and Mr Sullivan providing full details of their income and assets and outlining the "maximun level of anti-embarrassment protection" they could provide the bank with over an agreed period following any settlement being arrived at.
Last March, solicitors for IBRC wrote the special liquidator had rejected the settlement proposals being offered at that stage and the bank intended to proceed with the court action. The alleged breaches of the Consumer Credit Act were also denied.
When granting a possession order for Forenaghts in 2009, Ms Justice Elizabeth Dunne ruled, although the €8m loan was given to allow Mr Fanning buy €5m worth of shares in Smart Telecom and to re-finance a €2.9m loan on Forenaghts, the loan was secured on his home.
She rejected Mr Fanning's claim the loan was given on foot of assurances from businessman Brendan Murtagh, who took over Smart in 2006, the company would repay it.
The bank claimed the loan was secured on a first legal claim in its favour over 15 million Smart shares and Forenaghts House.