Syndicate of banks to pursue developer Sean Dunne for more than €163m in Commercial Court
A SYNDICATE of banks, that provided funds to Sean Dunne companies towards acquiring two hotels in Ballsbridge for €400m, is pursuing the developer for more than €163m.
It arises over Mr Dunne's personal guarantees of loans related to the purchase of Jury's Hotel.
An application by Ulster Bank in its capacity as security trustee for the syndicate to fast-track the proceedings in the Commercial Court is listed before Mr Justice Peter Kelly on Monday.
Mr Dunne is now based in the United States but has entered an appearance in the action via a Dublin-based law firm, Clerkin Lynch.
In purchasing the hotels, Mr Dunne had planned to build a €1.5 billion high-rise mixed development in Dublin 4, with a 37-storey tower as the centrepiece but that plan was rejected in January 2009 by An Bord Pleanála and the hotels were reopened under the D4 brand.
The synidcate's case arises from loans advanced from 2005 to DCD Builders Ltd, the parent company in the Dunne group, in connection with 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 whether 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, the banks says. 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.
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 23rd his company must vacate the hotels on January 1st because the syndicate was not renewing short-term letting arrangements, refused to yield possession until several outstanding issues were resolved, including about a rent rebate.
Under the settlement of those procedings, Mr Justice Kelly was told MJBCH Ltd (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 Ltd 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.
On foot of loans made in 2005 and 2006 to DCD Builders, the hotel properties on seven acres were acquired by October 2007 and lease agreements concerning them were later entered into with MJBCH.