Order for €22.5m over unpaid loans

BANK OF Ireland has secured a summary judgment order on consent for €22.5 million against a Dublin businessman over unpaid property loans.

The bank told Mr Justice Peter Kelly yesterday it intends to seek similar orders shortly over the same loans against Smart Telecom purchaser Brendan Murtagh and two Cork businessmen.

One of them, Greg Coughlan, is the subject of an arrest warrant over his failure to obey court orders in proceedings over other unpaid loans, and is believed to be in Spain.

The proceedings arise over a July 2006 €22.6 million loan facility to all four defendants: Frank Gormley, Maple Road, Clonskeagh, Dublin; Brian Madden, Well Road, Douglas, Cork; Mr Coughlan, Fastnet House, The High Road, Kinsale, Cork and Mr Murtagh, Dunheeda, Kingscourt, Co Cavan.

Most of the monies were advanced to refinance previous loans advanced by the bank to purchase 17 apartments – 10 at Copley Hall, Cotter Street, Cork, and seven at Estuary Court, Rochestown Road, Cork – plus eight car parking spaces in Cork city and two commercial units at Fingal Bay Business Park, Balbriggan. Some €5.7 million was also advanced for equity release.

The facility was secured by mortgages over the properties and a first legal charge over other properties referred to as the “UK properties”.

The bank claimed the facility was repayable in full on or before June 30th, 2009. Demand for payment was issued in July 2010.

Yesterday, Mr Justice Kelly was told Mr Gormley was consenting to an order for summary judgment for €22.5 million against him and the judge made that order.

Counsel for the bank said it had been unable to serve Mr Coughlan who, counsel said, might be in Spain.

The bank intended to apply to have the proceedings against the other three defendants admitted to the Commercial Court in the near future, the judge was told.

Mr Justice Kelly noted a warrant had been issued previously for the arrest of Mr Coughlan. To date, Mr Coughlan has not been located.

The warrant was issued last April in other proceedings by a number of investors which were brought against Mr Coughlan, Mr Murtagh and Mr Madden concerning unpaid loans advanced for property development in Poland.

Mr Coughlan had failed to obey court orders aimed at executing judgment against him for more than €28 million in that case and Mr Justice Kelly issued the warrant after hearing evidence from gardaí which satisfied the court Mr Coughlan was evading arrest.

The proceedings in that case were brought by Loparco SA, a Luxembourg-registered company through which investors provided some €20 million for Polish property deals, to be managed by the Howard Holdings property group.

Loparco secured judgment last January for €28.1 million against Mr Murtagh, Mr Coughlan and Mr Madden.

To date, the three men have had total judgments for more than €60 million entered against them in the Commercial Court.

Mr Murtagh (64) at one time had an estimated net worth of €271 million but now has liabilities of €353 million, the judge heard.