EBS secures €33m judgment against two businessmen

THE EBS Building Society has secured summary judgment orders for €31.7 million, plus interest of more than €1.6 million, against Kingspan co-founder Brendan Murtagh and another businessman over their failure to make certain payments under a settlement agreed last year in proceedings brought over unpaid loans for land developments in Co Cork.

Mr Justice Peter Kelly noted yesterday that the terms of settlement had included the defendants raising $60 million in funds and the handing over to the EBS of a painting by artist Jack B. Yeats entitled Looking Towards The Lake. The painting was handed over but the fundraising had not been completed to date, he was told.

Given the admitted breaches of the settlement, counsel for the EBS applied at the Commercial Court yesterday for final judgment orders against Mr Murtagh, Dunheeda, Kingscourt, Co Cavan, and Greg Coughlan, Fastnet House, Ardbrack, Kinsale, Co Cork.

Declan McGrath, for the defendants, said he could not dispute there had been default of the provisions of the settlement agreement and that the EBS was entitled to apply for summary judgment.

However, he urged a two-week delay in any judgment order. The process of raising the $60 million on behalf of the defendants by Assured Capital Management via a “bond” was near finalisation and could be adversely affected by the entry of judgment.

The fundraising, the court heard, required the defendants to pay some €250,000 to EBS by November 30th last in partial discharge of VAT liabilities and also to pay a further €250,000 each month afterwards until the full VAT liability to EBS was paid off.

The settlement also provided the defendants were to pay EBS some €300,000 per month from March 2010 to pay interest on other loans and to use their best efforts to increase those repayments from September next.

If there was any breach of the terms of settlement, the EBS would be entitled to final judgment for all monies owed.

After Mr McGrath made his submissions, counsel for the EBS said his instructions were to seek judgment now, but the matter was in the hands of the court.

Granting summary judgment, the judge said it was acknowledged there had been a breach of the settlement obligations. In addition, given the EBS’s refusal to consent to the application not to enter judgment at this stage and the acknowledgement time was “of the essence” here, he would also decline to direct that the judgment order not be drawn up now.

The settlement was agreed last year between EBS, Mr Coughlan and Mr Murtagh. The building society had also brought its proceedings against Brian Madden, Outwoods, Dorea, Rathfeigh, Tara, Co Meath who did not enter an appearance in the case.

The case arose from loans provided by EBS to Ballycarney Properties Ltd and Moira Properties Ltd, both with addresses at Lapps Quay, Cork, for the purchase and development of sites totalling 32 acres at Little Island, Cork.

EBS claimed all three defendants were directors of both companies and had executed guarantees in June 2007 over loans of more than €31 million to the companies.

Because of the failure of both companies to repay some sums due under the loan facilities, EBS served a letter of demand on both in November 2008 seeking repayment of the full amount, plus interest. In December 2008, the society asked the defendants to comply with the guarantee but said no sums were repaid, after which it brought the court action.