AIB pursues 14 Cork businesspeople over €25m loan guarantees

Commercial Court agrees to fast-track Balgnac Investments case as one defendant consents to judgment

AIB is seeking summary judgment for sums totalling around €25 million against 14 business people over alleged default on loans which they had guaranteed.

The 14, along with another man who previously consented to judgment for €1.68m, gave personal guarantees of between €170,000 and €3.8m on loans made to a company in 2008.

AIB claims the 15 were liable on a several basis with limited individual liability. The 15 are shareholders in Blagnac Investments Ltd, an Irish registered company which holds the entire issued share capital in a Luxembourg registered company called Blagnac Investments Sarl. This company in turn owns the entire share capital in 2 Rue Dieudonne Costes SAS, a company incorporated in France.

The money was loaned to the French registered company which was guaranteed and indemified by the 15.

The loan was due to be repaid by September 29th 2013.

After the company defaulted, the bank demanded repayment of a total of just over €27 million, inclusive of interest, by July 20th, 2015, AIB manager Olga Gusak said in an affidavit. Despite demand letters, the defendants failed, refused or neglected to repay, she said.

The alleged liabilities of the 14 are:

Seamus O’Mahony, Old Chapel, Bandon, Co Cork (€2.3 million);

Tom Kingston, Corran, Waterfall, Cork, and John Gaffney, Ballyleigh, Waterfall (joint liability for €3.89 million);

Jeremiah Galvin, Lower Muckross Road, Killarney, Co Kerry (€1.69 million);

Chris and Marina Kay, Dromderrig, Kinsale, Co Cork (€947,367);

Barry Harte, Main Street, Timoleague, Co Cork (€1.15 million liability);

Tim Smyth, Bridgewater, Crosshaven, Co Cork (€472,873);

Sam Russell, Delford Drive, Rochestown, Cork (€472,873);

Connor Phelan, Phelan's Pharmacy, Carrigaline, Co Cork (€1.68 million);

Brendan O’Shea, Rochfordstown, Waterfall, Cork (€1.68 million);

Mark O’Shea, Glendale Flowers, Waterfall (€1.68 million);

Donal Kelleher, Belfry Heights, Bandon, Co Cork (€170,000) and;

Ray Reidy, Greenfields, Ballincollig, Co Cork (€674,182).

After a 15th man, PJ Flynn, Castlewoods, Old Chapel, Bandon, consented to judgment against him for €1.68 million in the Commercial Court yesterday, Mr Justice Brian McGovern entered judgment for that amount against him.

The judge agreed to fast-track the case against the other 14 defendants in the court’s list. After being told the other defendants needed time to instruct solicitors, they were given until November 13th to file replying affidavits setting out any defence they may have to summary judgment.