Getty family goes to court over Punchestown loan

The billionaire Getty family will open a High Court action against Punchestown racecourse next Tuesday for the repayment of a €3.7 million loan given under the passports-for-investment scheme.

Efforts to broker a settlement with the Getty-owned vehicle, GT Equinus, in recent weeks have failed. As result, the case, begun last year, is scheduled to open on Tuesday and could go on for several days.

GT Equinus, which is based in Reno, Nevada, in the US, is suing Punchestown's operating company, Blackhall Racing, which is owned by the Kildare Hunt Club (KHC), the ultimate owner of the racecourse and its surrounding lands, and other parties.

The US-based Gettys loaned the money to Punchestown in 1998 to help fund its redevelopment. Five members of the family received Irish passports in return. Under the terms of the deal, GT Equinus was to receive dividends which could potentially have increased Punchestown's full liability to €4.2 million.

When Punchestown ran into financial difficulty in 2002, State agency Horse Racing Ireland (HRI) took over management of the course. Its chairman, Denis Brosnan, brokered a deal with GT Equinus. The company agreed a settlement of €2.15 million, in staggered payments, the last of which should have been made at the end of 2006.

However, GT Equinus was only paid €150,000 of this total, as a row between the hunt club and HRI over leases held by the State agency as security for loans to Punchestown, resulted in the payments being delayed.

Both HRI and the club agreed to settle that dispute last year but in the meantime, GT Equinus had begun proceedings for the repayment of the full amount it loaned to Punchestown. The case does not involve HRI.

Attempts to negotiate a further settlement in recent months failed. GT Equinus was offered €2.15 million, plus interest and extra payments that would have brought the final figure to around €2.5 million.

However, the US company rejected this and intends to proceed with the court action. Blackhall Racing intends to defend the case vigorously.

The Getty family is descended from entrepreneur Jean Paul Getty, one of the first people in the world to amass a fortune of over $1 billion, which he made in the oil business. His son, Gordon, sold that business for $10 billion to Texaco 20 years ago.

Punchestown is Ireland's premier national hunt racing venue. Its biggest meeting is its four-day festival, held at the end of every April. It hosts racing in October and May every year.

When HRI took over management of the racing business in 2002, it was losing an estimated €500,000 a year. It made a profit of €500,000 in 2006, when record crowds attended the festival.

It is also the venue for the Guinness and MCD-backed Oxegen rock festival every summer, as well as a range of exhibitions and trade shows.