Liquidation of firm blackest day in colourful career of controversial businessman
THE decision to put the company that owns the Citywest Hotel complex into liquidation marks the most serious reverse so far in the colourful career of controversial property developer Jim Mansfield.
Ever since Bank of Scotland (Ireland), which is owed €140m, moved to appoint a receiver to HSS last July, the future of Jim Mansfield's hotel and property empire has been hanging by a thread.
Situated on a 380-acre site, Citywest claims to be the largest hotel in Europe with 774 bedrooms, a conference centre with the capacity to accommodate 4,100 people and a championship golf course designed by Christy O'Connor Junior.
Yesterday, the pressure on Mr Mansfield increased dramatically when HSS, which owns the Citywest Hotel complex, was put into liquidation.
Apart from BoS(I), other HSS creditors include the Revenue Commissioners, who are owed €3.5m, Christy O'Connor Junior, who is owed €1.4m, and the law firm originally set up by solicitor Noel Smyth, which is owed €500,000. Unsecured creditors are owed €37m.
Other properties owned by Jim Mansfield, including Finnstown House Hotel, Weston Aerodrome and Palmerstown Golf Club, are not affected by the HSS liquidation.
Now aged 70, Mr Mansfield has never been one to shy away from controversy. He started out in the dog-eat-dog plant-hire business.
HE first came to the attention of the wider public in the aftermath of the 1982 Falklands War. After sending an armada 7,000 miles to successfully defend the right of 2,200 islanders to be British subjects, the Thatcher government then spent several billion pounds building a military airbase on the windswept South Atlantic islands.
When the job was finished, the British government was left with 1,100 expensive earth-moving machines stuck in the middle of nowhere.
Enter Jim Mansfield. He purchased the machines from the British government and then sold them at auctions in Atlanta in the United States and Liverpool in the UK. Despite the Liverpool auction being held in a tax-free 'Freeport', the UK Customs and Excise hit Mr Mansfield with a huge VAT bill after the sale.
This triggered an epic legal battle which went all the way to the European Court of Justice. While Mr Mansfield likes to claim that he was "vindicated", the truth is that he reached a compromise with the UK tax authorities, paying a reputed six-figure sum to settle the matter.
The profits from the Atlanta and Liverpool auctions financed his purchase of what was to become Citywest in 1990. In recent years Citywest has played host to both the Fianna Fail and Fine Gael ard fheiseanna.
In characteristic fashion, Jim Mansfield first built the conference centre and only then bothered to apply for planning permission. After a period of legal jousting with South Dublin Country Council, he successfully obtained planning permission for the conference centre.
However, the most controversial chapter in Mr Mansfield's career involved Weston Aerodrome, which he purchased in 2000. In 2006, Belgian police seized heroin worth an estimated €7m, which was about to be loaded on to an Irish-registered plane.
Not alone was the plane bound for Weston, it also belonged to Mr Mansfield and had been hired from him.
He categorically denied any involvement in the affair, stating that: "Weston is one of the only airports in Ireland that no drug has ever come through."
Jim Mansfield's sons, Jimmy Junior and PJ, have also attracted more than their fair share of publicity down the years. Jimmy dated the tragic model Katy French, while PJ was married to former Miss Ireland Andrea Roche for three years.
Last January, Jimmy was convicted of drunk driving after he was stopped by gardai while driving his father's Rolls Royce and over twice the legal alcohol limit. When stopped, he reputedly told gardai that he was "as drunk as a f****** fool".
Jimmy's legal woes continued when AIB registered a legal judgment against him in July for an unpaid debt of €6.3m. The money was borrowed to fund a property deal that later went sour.
In mitigation, Jimmy claimed that he suffered from a reading disability and had only a limited understanding of the transaction. This defence was rejected by Mr Justice Peter Kelly, the head of the commercial division of the High Court, who pointed out that Jimmy was a director of no fewer than 25 companies and could pilot a helicopter.
With his most valuable asset, which was worth up to €200m at the top of the property market, now gone, Jim Mansfield now faces the most serious challenge of his career. Has he given any of his banks personal guarantees? Are any of the HSS debts secured against his other properties? What level of borrowings are outstanding against these other properties?
Regardless of the answers to these questions, what is certain is that with the National Convention Centre at Spencer Dock now up and running, the convention business which was Citywest's bread and butter is way down. This has reduced its value even further and means that the unfortunate HSS creditors will be facing an even bigger shortfall on the money they are owed.