Having settled an extraordinary dispute with his brother Hugh, property developer Greg Kavanagh is again in the wars
It has been an eventful few months for Greg Kavanagh, the self-proclaimed Ronaldo of the Irish property market. No sooner had the dust settled on an extraordinary dispute with his brother Hugh over control of several of their companies, than he has found himself embroiled in yet another high-stakes legal row.
While the clash with his brother involved claims of a physical fight and the alleged unlawful removal of Hugh as a director of 19 companies, the latest dispute sees Mr Kavanagh (35) being chased by an investor for a debt of €6.4m. Papers filed in the High Court say the loan was due to be repaid in 2016.
The meter is still running on the debt. With every day that passes, an additional €3,272 in interest is owed.
The legal exchanges in the case have already been feisty, and Mr Kavanagh has said he intends to fight the action.
From humble beginnings, Arklow-born Kavanagh became one of the few success stories in the property sector after the last recession.
He co-founded New Generation Homes in 2011. Backed by investors, it bought up sites around Dublin at knock-down prices and had a number of successful developments.
When Mr Kavanagh left the business in 2016, it was reported he would receive as much as €150m in an exit deal agreed with London-based backers M&G Investments.
While he has continued to work on property ventures, he has also diversified and is involved in Bezzu, an app that allows people to shop online at independent fashion and homeware stores. Indeed, part of the dispute with his brother related to claims by Hugh that the construction side of the business was experiencing cash-flow issues due to funds being channelled into the app.
The dispute between them was settled on confidential terms in May. Whatever deal was struck, it does not appear to have involved the reinstatement of Hugh as a director of the 19 companies.
Now, with the additional headache of the €6.4m debt case, 2020 is turning out to quite a tough year for the man who once likened his business acumen to the footballing skills of Cristiano Ronaldo.
In the latest High Court case he is being sued by Dublin property investor Anne O'Neill (64). She is seeking summary judgment against him and has made a number of potentially damaging allegations.
In particular, she claimed that, "as a means of deflection, delay and prevarication", he gave repeated assurances the debt would be paid.
In an affidavit, Ms O'Neill said due to these assurances she exercised forbearance and put off issuing proceedings.
She said she finally sued after reading about the settlement with Hugh in the press.
Ms O'Neill noted Hugh had claimed a 50pc ownership interest in various businesses he was involved in with his brother. She said the settlement gave her "an immediate concern" Greg Kavanagh's assets may have been reduced after resolving the dispute.
The developer had a minor legal victory this week when his lawyers successfully argued against the matter being entered on the list of the fast-track Commercial Court.
Instead it will have to wait in line on the High Court's ordinary non-jury list.
In an affidavit, Mr Kavanagh was typically bullish about his chances of prevailing, claiming to have "a good defence" and a counterclaim.
The three loans at the centre of the dispute were advanced by Ms O'Neill to Mr Kavanagh's Ballycrag Developments Ltd in 2013 and 2014. The company was dissolved last year.
At the time Mr Kavanagh was on the road to establishing himself in the Irish property market, but finance was difficult to come by, with the main banks effectively closed to builders and developers.
The first loan facility was for a sum of €500,000 in September 2013 and the second for €475,000 that December.
But the end of January 2014 these had been consolidated and a third loan of €2m was offered, with a hefty interest rate of 20pc. Security for the loans was a fixed charge over a property in Clonskeagh.
According to Ms O'Neill, who is the wife of commercial property solicitor Robert Walsh (67), the loans were due to be repaid by February 28, 2016. She said Mr Kavanagh agreed to put the property on sale in the event the money could not be repaid at that time and that he "personally guaranteed" to make up any shortfall after a sale.
By that stage the sum owed was €2.88m.
Ms O'Neill said Mr Kavanagh guaranteed that if the property was not sold by the end of April that year, he would personally repay the money.
She claims he subsequently outlined various scenarios which would result in her being paid. Newspaper reports that he was to receive €150m from M&G Investments were a significant comfort to her, she said, as Mr Kavanagh said he would repay her from this.
But she claims he then had a dispute with M&G and, as a result, it did not pay the reported amount. This dispute was eventually resolved, but she says she was still not paid.
In 2017, Mr Kavanagh became embroiled in another legal row, this time with Bray Wanderers director Gerry Mulvey, a former business partner.
They sued each other, with both sides claiming the other breached the terms of an agreement under which construction and property company shares were to be transferred to Mr Kavanagh in return for him paying €4.8m to Mr Mulvey. According to Ms O'Neill, Mr Kavanagh told her he wanted to dispose of that claim and would then be in a position to pay her back.
She claims that although the Mulvey case was settled in 2018, he still refused to pay.
Assurances were given by Mr Kavanagh on a number of occasions that the Clonskeagh property would be sold, she said. However, two prospective sales did not go ahead.
Ms O'Neill said that after threatening legal proceedings, Mr Kavanagh told her he had arranged a loan from a private equity firm, which would allow him to pay off the debt. However, she said she understood the loan was not drawn down.
Mr Kavanagh also filed an affidavit, but did not outline his defence or counterclaim.
He said the affidavit was purely for the purpose of opposing the entry of the proceedings on to the Commercial list and he would require more time to prepare a response to the application for judgment. He said that if he did not address each of her claims, this did not mean he was admitting them.
Mr Kavanagh claimed Ms O'Neill was actually acting as a "proxy, agent or alter-ego" for her husband, and that all his dealings in relation to the loans had been with Mr Walsh.
He raised the delay in issuing the proceedings and disputed that Ms O'Neill, or rather Mr Walsh, had sought to engage in any forbearance.
"Rather, it would appear that Mr Walsh has elected instead to facilitate the accrual of penal interest at a rate of 20pc per annum and has now elected to collect," he said.
Various threats of enforcement proceedings were received from Mr Walsh, he claimed. The affidavit outlines emails from Mr Walsh during 2018 and 2019, including ones threatening the appointment of a receiver or a liquidator over Ballycrag, and the instruction of 'Stubbs Gazette' to collect the debt. Another email to Mr Kavanagh's solicitors was said to have threatened to refer "serious breaches of law" to the Director of Corporate Enforcement.
Mr Kavanagh also said the dispute with his brother had "no relevance or connection" to the proceedings.
The matter is back before the High Court in September.