Developer’s wife awarded €9,000 a month expenses
Court grants wife of bankrupt Larry O’Mahony living expenses from frozen €1 million
The wife of discharged bankrupt developer Larry O’Mahony has secured court orders allowing the family living expenses of €9,000 a month, out of some €1m frozen monies, pending a ruling on whether State-owned Irish Bank Resolution Corporation has any claim to them.
Christine Connolly, who claims she owns the monies from which the expenses are being paid, sought some €10,000 a month total living expenses.
This included some €3,000 to €3,5000 monthly costs of renting a four bedroom home in Dublin 4; €1,644 school fees and extra-curricular expenses for her three children; about €820 to cover monthly car expenses and €165 for a golf subscription.
That sum was opposed by IBRC whose counsel Cian Ferriter SC argued, that while Ms Connolly and her husband Mr O’Mahoney — a former business partner of Priory Hall developer Thomas McFeely — had “lived a Celtic Tiger lifestyle” when they had wealth, they did not have that any more and should adjust accordingly.
While IBRC accepted the relevant law provides for payment of living expenses to fund the lifestyle to which the relevant person was reasonably accustomed, IBRC was conscious, if its claim to the frozen monies was upheld, the expenses were being funded by the Irish taxpayer, counsel said.
Martin Hayden SC, for Ms Connolly, said the expenses sought were reasonable and his client had reduced the family outgoings.
IBRC had previously agreed to expenses of some €6,500 a month and Ms Connolly wanted an additional sum of €3,750 monthly to cover costs including renting a property for her family who must leave their home on Dublin’s Shrewsbury Road shortly as it had been repossessed by NAMA, Mr Hayden said.
The debt on Shrewsbury Road far exceeded what it was sold for and a High Court stay on the July repossession order to allow them find alternative accommodation would expire on December 1st, he added.
Mr Justice George Birmingham said Ms Connolly had last June sought living expenses of €8,176 monthly — not including any rent as the family were then still living in Shrewsbury Road — and that sum was reduced, by agreement of both sides, to €6,500.
Ms Connolly was now seeking an additional sum of €3,750 a month to rent one of two properties which she considered appropriate. Both properties — at Upper Leeson Street and Serpentine Avenue, Ballsbridge, looked “attractive and desirable”.
It was accepted there would have to be some topping up of the €6,500 figure to meet rental costs, there should be some regard to the family’s previous lifestyle, they were not required “to live in penury” and their children should continue in their local schools, he said.
Where there was a claim over the monies at issue, the court must also exercise caution, he added.
In the circumstances, he considered the appropriate figure for monthly expenses was €9,000. He believed that gave scope for the family to find an attractive rental property or live in either of the two properties suggested by them on the basis of trimming back their expenses.
The judge also noted the sides had agreed that a sum of about €67,000 should be paid out to meet some legal costs incurred by Ms Connolly in the proceedings to date, without prejudice to IBRC’s right to dispute that payment later. He reserved other costs issues for determination after the hearing of the full proceedings and adjourned the matter to January.
Today’s application arose in an action brought by IBRC against Portal Properties LLC and Ms Connolly and Ms O’Mahony arising from a loan for some €2.5m allegedly advanced to Portal from 2006 by Irish Nationwide Building Society (since taken over by IBRC) to buy a luxury property at Pinheiros Altos, Almancil, Portugal.
It is alleged the couple effectively controlled Portal and allegedly induced INBS to enter into a loan agreement on foot of fraudulent and/or negligent misrepresentations.
IBRC claims part of the security for the €2.5m loan was an undertaking related to sale proceeds of the luxury property, plus an alleged undertaking by Ms Connolly over sale proceeds of an adjoining property owned by Ms Connolly.
Both properties have been sold and the proceeds are frozen pending the court action. The net sale proceeds of the luxury property were about €785,000 while those of the adjoining property, which Ms Connolly claims she bought for €420,000 with her own money, are some €315,000. Some €39,000 living expenses paid to Ms Connolly since June have been deducted from the €315,000 proceeds, leaving about €276,000 in that account. The further expenses will be taken from that account.
The couple have denied the claims.
In her defence, Ms Connolly has denied the claims against her, denied any undertakings and denied any liability to IBRC. She has also counterclaimed for damages on grounds including IBRC had wrongly alleged fraud against her.
In her defence, Ms Connolly claims Mr O’Mahony decided to buy the luxury property as a holiday home for his family from a previous marriage.
Mr O’Mahony had an “intricate” business relationship with Michael Fingleton of INBS and had told her Mr Fingleton sanctioned the €2.5m loan, she claims. When the loan issued, INBS knew Portal already owned the luxury property and was not in fact the entity borrowing the money to buy that property, she alleges.