Anglo seeks €36.3m over unpaid property loans

ANGLO IRISH Bank is seeking summary judgment for more than €36.3 million against a Dublin businessman over unpaid loans related to the purchase of a large number of properties.

The bank’s proceedings against John Morrissey, Palmerston Road, Dublin, were admitted to the Commercial Court yesterday by Mr Justice Peter Kelly.

Last January, the bank appointed Tom Kavanagh as receiver over the secured assets of Mr Morrissey and of his wife, Carol Nolan. The assets included properties in Ranelagh, Rathgar, Rathmines and Monkstown in Dublin, and properties in Kildare and Clare.

The bank said Mr Kavanagh had sold some of those properties while most were being let. All money realised had been allocated against the debt and were reflected in the demand for €36.3 million.

It also expressed concern that while correspondence with the receiver was continuing, some of Mr Morrissey’s unsecured assets were allegedly gifted to other entities in trust for his children and thus were not available to help reduce his liabilities to Anglo.

Brian Dempsey SC, for Mr Morrissey, said yesterday his client may have a case for breach of fiduciary duty against the bank arising from the manner of restructuring of loans over a 10-year period.

Mr Morrissey had “great talents” as a property developer and only borrowed what was reasonable up to 2006, Mr Dempsey said. There was an “explosion of indebtedness” from 2007 and an issue arose whether the bank had a fiduciary duty to act in the interests of the customer. Mr Justice Kelly agreed to adjourn the application to allow Mr Morrissey to provide an affidavit outlining any defence.

Anglo claims its first loan to Mr Morrissey was a €3.6 million facility in 2000 to buy a unit at Park West Business Park, Dublin. It claims that facility was restructured by another facility issued in late 2006, to be repaid by January 2008.

A €20.9 million facility issued to Mr Morrissey in July 2007 rescinded all previous facilities and was to be repaid on demand or by July 2010, the bank claims. Another facility for €4 million was advanced in October 2007 to part-finance the purchase of a share portfolio and to capitalise the arrangement fee of €20,000.

The bank claims it had discussions with Mr Morrissey in 2008 about refinancing and, after accepting his proposals, a new overall facility was agreed.

That was to be secured by charges over a portfolio of 18 properties and a specified deposit account and by a personal guarantee from Mr Morrissey’s wife, supported by a first legal charge over a property in Monkstown and one in Rathgar, and a lien over Mr Morrissey’s share portfolio account with Bloxham Stockbrokers.

The bank claimed it wrote to Mr Morrissey from late 2008 following difficulties meeting repayments and issued a demand in January 2009 for €38.3 million.

After engagement with Mr Morrissey had resulted in no satisfactory proposals, it appointed the receiver.

John Morrissey from high-flying to high-end homes

JOHN MORRISSEY is one of of a number of executives at Guinness Peat Aviation (GPA), the aircraft leasing operation run by Ryanair founder Tony Ryan, who went on to make a name for themselves in Dublin business circles.

He and Domhnal Slattery founded another aircraft lessor, International Aviation Management Group, which they subsequently sold on to the Royal Bank of Scotland.

He was also a backer of gaming software and special effects group, Havok, which computer chip giant Intel, purchased in 2007 for $110 million (€78 million).

That year, Morrissey joined forces with Tony O'Riordan, formerly of Hibernian Life Pensions, to get Capital D off the ground.

The business set out to buy and renovate high-end homes in Dublin's more affluent residential areas and to build new high-end homes. It was originally known as D 246 after the capital's posh southside postcodes.

The group raised a €20 million fund for the purpose and used that to leverage borrowings from Bank of Scotland (Ireland).

Among those who invested were financier Dermot Desmond, Electricity Supply Board chairman Lochlann Quinn, technology entrepreneur Bill McCabe and former Voluntary Health Insurance chief Vincent Sheridan.

However, it mistimed the property market, which had already peaked and was heading into the current downturn.

The following year, its operating arm, Malakoff, was wound up and Brian Hyland of Baker Tilly Ryan Glennon was appointed liquidator.

Capital D itself wrote down the value of its assets by €1.48 million in 2008. BARRY O'HALLORAN