Company director denies he is liable to repay €8m in development loans
David Kennedy claims Bank of Scotland’s 20% stake is grounds for lack of liability
Loans to David Kennedy’s company were advanced for purposes including the purchase and development of a development on a 13-acre site at Clancy Barracks, Inchicore
Development loans of some €260 million were advanced to a company on foot of securities including a guarantee of one of its directors limited to €8 million, the Commercial Court was told yesterday.
However, the director, David Kennedy, with an address in Jersey, the Channel Islands, will argue he is not liable to repay anything on grounds including that Bank of Scotland had a 20 per cent shareholding in the borrowing company, Dublin-registered Clancy Quay Properties Ltd.
No substantial decisions concerning development could be taken without the bank and various actions of it had caused losses, Edward Farrelly, for Mr Kennedy, said.
The bank, for example, reneged on the building of an international school and also refused to let the company proceed with some €26 million worth of closed contracts, he said.
Mr Justice Peter Kelly agreed to an application by Kelley Smith, for Bank of Scotland, to fast track its action against Mr Kennedy in the Commercial Court.
BOS, acting as security trustee concerning loans of some €260 million advanced by Bank of Scotland Ireland and National Irish Bank to Clancy Quay properties, is seeking summary judgment for some €8 million against Mr Kennedy.
The loans were advanced for purposes including the purchase and development of a mixed use development on a 13-acre site at Clancy Barracks, Inchicore, Dublin, over which receivers have been appointed by the bank.
The judge said, while the borrowings at issue were some €260 million, the 2007 guarantee of Mr Kennedy was limited to €8 million. It seemed to be suggested, if the bank was writing off €260 million, that should include the €8 million, he noted.
Ms Smith said the line of defence being set out by Mr Farrelly was not argued before this and she was concerned it could be spurious.
Mr Farrelly, who did not oppose the case being fast tracked, said there had been negotiations between the sides and that was why this line of defence had not been set out before now.
Mr Justice Kelly said he would allow Mr Kennedy three weeks to outline on affidavit the issues being raised and would fix the summary judgment application for hearing on July 31st.
Having been told Bank of Scotland was seeking to fast track other related proceedings, the judge indicated he would deal wth those next week.