Court orders winding-up of Dunne firm over guarantees

 

THE HIGH Court has made orders winding up a company of developer Seán Dunne arising from its guarantees for €262 million in loans made to another company to buy the Berkeley Court and Jurys Hotel sites in Dublin 4.

Ulster Bank, represented by Declan Murphy, petitioned the court on behalf of a syndicate of lenders to appoint a liquidator to MJBCH Ltd after the firm failed to honour guarantees governing repayment of €262 million loans advanced to purchase the sites.

Ms Justice Mary Laffoy appointed Declan Taite of RSM Farrell Grant Sparks as official liquidator to the company, with a registered address at Merrion Square, Dublin, after finding it was hopelessly insolvent and unable to pay its debts.

The company was established in 2006 as Mountbrook Merrion Road Development Ltd before changing its name to MJBCH in October 2007. Its directors are Seán Dunne and Ross Connolly.

MJBCH’s sole shareholder is Padholme, an Irish-registered company with a registered address at Merrion Square.

In 2005 and 2006, DCD builders borrowed almost €400 million from a syndicate of banks with plans to build a €1.5 billion high-rise mixed development, with a 37-storey tower as the centrepiece, in Dublin 4.

That plan was rejected in January 2009 by An Bord Pleanála.

Mr Murphy said it was the bank’s case that MJBCH had entered into agreements guaranteeing all liabilities of DCD builders, the parent company in the group of companies controlled by Mr Dunne.

The bank served a formal demand for payment of €262 million in May last. More payment was made and the bank also failed to get repayment under the guarantees.

Mr Murphy said the bank was now seeking the appointment of a liquidator as it believed this was in the best interest of all the parties concerned.

The judge made orders winding up the company and adjourned the case to the High Court Examiner’s Court later this year.

The directors of MJBCH were also ordered to provide the court with a statement of affairs.

Last month, Mr Dunne consented to the entry of €164.5 million in summary judgment orders against him at the Commercial Court over his personal guarantees of loans related to the purchase of Jury’s Hotel.

Those orders were also sought by Ulster Bank on behalf of the syndicate of banks.

A further senior debt facility for €100 million was made available to DCD in 2008 related to the Berkeley Court Hotel and site.

The Berkeley Court facility letter was secured by a separate Berkeley Court guarantee but that security was not the subject of the proceedings against Mr Dunne.