One51 chief tells court he did not understand term 'recourse'

BUSINESSMAN PHILIP Lynch told the Commercial Court yesterday that in 2006 and 2007 he had not understood what the terms “recourse” and “non-recourse” meant.

The chief executive of the One51 investment group made the comments to Paul Sreenan SC, for solicitors LK Shields, in proceedings by the Lynch family aimed at preventing AIB Bank pursuing them over a €25 million loan for a development project in Waterford.

Mr Lynch agreed that, at the same time, in 2006 and 2007, he was a director of several companies, had been on the board of Irish Life and was chief executive of a major plc.

In proceedings against AIB and the law firms LK Shields and Matheson Ormsby Prentice which allegedly provided advice concerning the Waterford deal, Mr Lynch and his family – his wife Eileen and their children Judith, Philippa, Therese and Paul – insist their involvement was on the basis the loan would be secured only on the Waterford lands, with AIB having no recourse to them individually. The defendants have denied the claims against them.

Earlier yesterday, the court heard that businessman Paschal Taggart will claim he told Mr Lynch in 2006 that if Mr Lynch stayed with developer Gerard Conlan long enough he would “lose” as Mr Conlan was “a gambler”. Mr Taggart is alleged to have made the comments in 2006 in the context of reference to the Waterford project.

Mr Lynch told his barrister, Michael McDowell SC, that Mr Taggart had been employed by the Conlan family for years and was held in high regard by them and he was baffled why Mr Taggart would refer to Mr Conlan as a “gambler”.

Mr McDowell said Mr Taggart had also claimed he had advised at a Lynch family meeting in July 2007 that the deal was high risk and they should dispose of the lands. Mr Lynch said he did not recall Mr Taggart saying that.

When Mr Sreenan said yesterday Mr Conlan has claimed his borrowing was non-recourse on foot of an agreement Mr Lynch made with AIB, Mr Lynch said he had made no agreement with AIB on behalf of Mr Conlan.

Mr Sreenan noted Mr Lynch had not called Mr Conlan as a witness. Mr McDowell objected and said LK Shields had also chosen not to call Mr Conlan.

Asked for his response to claims the Lynch family did not take steps between 2007 and 2009 to mitigate their loss by, for example, taking steps to sell the lands, Mr Lynch said he had no concern at that stage there was any risk to himself or his family as they understood AIB had no recourse to them for the €25 million loan.