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Banks hoping to fast-track €163m Dunne hotel case

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 his 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 €1.5bn 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 Pleanala and the hotels were reopened under the D4 brand.

The syndicate'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.







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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 23 that his company must vacate the hotels on January 1 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.

hnews@herald.ie


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