Order against Dunne

DEVELOPER SEÁN Dunne has consented to the entry of €164.5 million summary judgment orders against him at the Commercial Court over his personal guarantees of loans related to the purchase of Jurys Hotel.

The orders were sought by Ulster Bank on behalf of a syndicate of banks that provided funds to companies of Mr Dunne to acquire Jurys and the Berkeley Court Hotels in Ballsbridge for €400 million.

When the matter came before Mr Justice Peter Kelly yesterday, he was told by Bernard Dunleavy, for the syndicate, that there had been developments and Mr Dunne was consenting to judgment.

Following publicity about an earlier application by the syndicate for leave to serve proceedings outside the jurisdiction on Mr Dunne – who is now based in the US – Mr Dunne had instructed that service would be accepted by solicitors here on his behalf, Mr Dunleavy said. A solicitor from the Dublin-based law firm Clerkin Lynch said Mr Dunne would consent to judgment in the updated sum sought by the bank – €164,586,493.

Mr Justice Kelly entered judgment in that amount, plus interest and costs.

Ulster Bank brought the proceedings in its capacity as security trustee for the syndicate. In buying the two hotels, Mr Dunne had planned to build a €1.5 billion high-rise mixed development in Dublin 4, with a 37-storey tower as the centrepiece, but that plan was rejected in January 2009 by An Bord Pleanála and the hotels were reopened under the D4 brand.

The syndicate’s case arose from loans advanced from 2005 to DCD Builders Ltd, the parent company in the Dunne group, in connection with the acquisition of Jurys. Mr Dunne provided personal guarantees as security for those loans.

Last January the bank, in its capacity as security trustee, demanded payment of some €260 million from DCD. When that was not paid, the bank demanded payment from Mr Dunne in February of some €163 million, being the sum allegedly due under the Jurys guarantee on that date, plus interest.

The bank claimed Mr Dunne had no defence to summary judgment. While considerable time had been spent liaising with him in an effort to see whether his debt could be rescheduled or managed, that had not yielded results and there was no option but to issue the proceedings, the bank said.

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 subject of the proceedings, it said.

Last January the syndicate settled proceedings brought by it to get possession of the hotel properties. The syndicate previously said it had entered into short-term letting agreements for lease of the hotels, expected to trade for some years while the banks decided the best strategy for recovery of as much of their money as possible.