Saturday 20 January 2018

Ex-minister Callely told to pay back €11m bank loan debts

Ivor Callely: risks financial ruin
Ivor Callely: risks financial ruin

Tim Healy and Louise Hogan

FORMER Fianna Fail junior minister Ivor Callely has been ordered to repay loans totalling €11m related to a disastrous property investment.

If he fails to repay the debt, the controversial former poll-topping TD could face financial ruin and even the prospect of bankruptcy.

Mr Callely consented to a High Court judgment being entered against him by the Irish branch of Investec Bank – which means he accepts that he is liable for the money owed but does not necessarily mean he has the means to repay the debt.

Securing a judgment is the first step lenders take to force a borrower to repay money owed. Failure by a borrower to act following a judgment can ultimately lead to bankruptcy.

The Irish branch of Investec Bank brought High Court proceedings against Mr Callely, with an address at St Lawrence's Road, Clontarf, Dublin, arising from a March 2007 loan agreement.

He and three other borrowers – John O'Dolan, Denis Kenny and Daragh Sharkey – borrowed €9.85m to buy property.

The bank claimed all four were jointly and severally liable to repay it under that agreement. It means the bank can demand repayment of the full amount of the loans from any of the four, if the debt was not honoured.

The loan was drawn down to be used for the purchase of 59 and 60 Clontarf Road, located on the seafront near Callely's home and adjacent to St Anthony's Church.

The plan was to demolish the two seafront houses and then, subject to planning, build 44 apartments and three shops.

DEMANDS

The case against the former senator was listed yesterday before Mr Justice Kevin Cross, who was told by Ciaran Lewis, for the bank, that Mr Callely was consenting to judgment for an €11m sum and the bank was agreeable to that.

Mr Callely was not in court. A woman who answered the door of his house in Clontarf last night said he was not at home and had no idea of his current location.

In its action, the bank claimed the loan agreement provided that the sum advanced, plus accrued interest, was to be repaid a year after the March 30, 2007, date of drawdown of the loan.

The bank said it later agreed to extend the final repayment date to June 30, 2008, and it brought the proceedings after making several demands for repayment.

It claimed the sum due, with interest, was €11.6m, but the sum Mr Callely agreed to was €11m, plus costs.

Mr Callely had argued, among other claims, that the loan agreement contemplated the execution by him of a guarantee and indemnity with the clear implication that his liability under the loan was to be under that guarantee and indemnity.

In those circumstances, he argued the case was improperly constituted.

Without prejudice to that claim, he also argued, unknown to him and without his consent, the bank had paid a €500,000 sum to one of his co-borrowers, John O'Dolan, now deceased, which was then used to pay off Mr O'Dolan's personal debts with the bank.

Mr Callely had also made a number of claims as to how a bank-appointed receiver had managed the property involved, and said he intended to take proceedings in that regard.

The bank argued that Mr Callely had no defence to its claim, and also said he was incorrect in relation to his allegations about a payment to Mr O'Dolan.

Mr Callely was first elected to the Dail in 1989. A former pharmaceutical sales rep, the highest point on the political ladder he reached was Junior Health Minister in 2002 and Junior Transport Minister two years later.

He resigned in December 2005 and lost his Dail seat in 2007. Although he also lost out in the Seanad election, he was appointed a senator by then Taoiseach Bertie Ahern. He did not seek re-election to the Dail or Seanad in 2011.

Irish Independent

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