BoI takes Nama adviser to court


A Dublin solicitor whose firm advises the National Asset Management Agency (Nama) is, with his wife, being pursued by Bank of Ireland in the Commercial Court for some €69.5 million over unpaid property loans and guarantees.

Brian O’Donnell and Dr Mary Pat O’Donnell, Gorse Hill, Vico Road, Killiney, Co Dublin, and companies in which they have shareholdings are alleged by the bank to have extensive additional borrowings of some €800 million with other financial institutions across several jurisdictions.

Mr O’Donnell’s practice of Brian O’Donnell & Partners, Merrion Square, Dublin, is among the firms contracted to provide legal advice Nama.

Mr Justice Peter Kelly today granted an application by Paul Gardiner SC, for Bank of Ireland, to transfer to the Commercial Court proceedings for €69.5 million summary judgment orders against the couple arising from various loans, including a €7.7 million loan to purchase a property at Ailesbury Road, Dublin, and other facilities to refinance property loans with Ulster Bank and Anglo Irish Bank.

Bank of Ireland claims default for some time of interest payments on various facilities and also that the couple had failed ultimately to advance acceptable proposals to address their indebtedness and that of their companies. Last December, the bank demanded repayment of the facilities and also demanded repayments under various guarantees of the couple.

Mr Justice Kelly heard today arguments by Maurice Collins SC, for the couple, of inactivity by the bank in relation to default such as disentitled the bank to have the case fast-tracked in the Commercial Court.

Mr Collins argued the bank had failed to give the couple a proper opportunity to service and refinance the various loan facilities. It could be argued there was an implied term in loan agreements the bank would act in good faith and not frustrate his clients so as to try and get advantage concerning properties over which it had no security, counsel said.

In an affidavit, Mr O’Donnell alleged the bank was trying to pressure him and his wife to sell shares in Redicent Ltd, a property holding company whose only asset was a prime property asset in the UK, Sanctuary Buildings, Westminister, London. The bank had loaned some £26.7 million to Redicent under a junior loan facility that was not part of these proceedings and not secured on the Sanctuary Buildings property or the shares of Redicent, he said.

Mr O’Donnell added he and his wife have been customers of Bank of Ireland for 34 years, had executed some €100 million in transactions with it during that time and had also operated Bank of Ireland's Treasury operations through Bank of Ireland Capital Markets to the extent of some €2 billion.

Mr Gardiner said it seemed Mr O’Donnell was both alleging the bank was putting pressure on him to sell the Sanctuary

Buildings property and also saying it had blocked the sale. Nothing put forward on behalf of the defendants amounted to a defence to the bank’s claim, he said.

The judge allowed three weeks to the couple to outline on affidavit a defence to the summary judgment application and listed it for hearing on March 3rd when he will also deal with the proceedings in which Bank of Ireland wants some €42 million summary judgment orders against three companies of the couple over the same loans.

The three companies are GreyStoke SA, a Luxembourg registered company; Vico Swiss Holdings AG; and Avoca Properties Ltd.

Mr Justice Kelly noted, apart from the €69.5 million claimed against the couple, a statement of affairs for Vico Capital, of which Mr O’Donnell was chairman, showed borrowings of some €800 million due to other financial institutions. The judge said there seemed to be some confusion about what Vico Capital is. It was described as a private equity firm and trading name of the couple.

In its statement of affairs, Vico was also said to have assets valued at more than €1 billion but Bank of Ireland has raised issues about the property values on which the assets statement was based.

The judge outlined various dealings between Bank of Ireland and the O’Donnells throughout 2008, 2009 and 2010. He said correspondence indicated the bank was seeking updated property values and information on security for the facilities and about the ability to service interest payments.

Based on the material before the court, he could not say there was torpor on the part of the bank, the judge said. The material was indicative of the bank watching the situation. In the circumstances, he would not be justified in refusing to transfer the case.