Lynch says €25m land deal was 'a minor detail' in his life at the time

ONE51 INVESTMENT group chief executive Philip Lynch has told the Commercial Court a €25 million deal in 2006/07 to buy development…

ONE51 INVESTMENT group chief executive Philip Lynch has told the Commercial Court a €25 million deal in 2006/07 to buy development lands in Waterford was “a minor detail” in his life at that time.

Mr Lynch also said he could not let developer Gerry Conlan – who was involved in the Waterford deal with Mr Lynch – be described as “a gambler”. Mr Conlan “is not a gambler and I would hate anyone to say that about him”.

This remark was a response to alleged advice by businessman Paschal Taggart, who was involved with both the Lynch and Conlan families, to Mr Lynch to the effect that if Mr Lynch “played with” Mr Conlan, he would lose as Mr Conlan was “a gambler”.

Mr Lynch also denied a suggestion he never had any arrangement with Mr Conlan whereby Mr Lynch could have exited the Waterford deal at any time, and at a profit, prior to the Lynch family signing up to a €25 million loan facility with Allied Irish Banks for that deal on February 8th, 2007.

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The court heard yesterday of a number of other loan facilities made available to Mr Lynch and members of his family by various financial institutions, including Anglo Irish Bank, AIB, Bank of Ireland Private Banking and Ulster Bank.

Those loans were advanced for several purposes, including property investments and to purchase shares in Thirdforce plc and One51, the court heard. One loan, from Anglo in 2007, was to provide a €6.5 million “line of credit” for Mr Lynch, while another, for €1 million from Bank of Ireland Private Banking, was to enable his wife, Eileen Lynch, to buy shares in One51.

Mr Lynch said he was not directly involved in all those facilities but believed most were repaid and there was no default.

Paul Sreenan SC, for LK Shields Solicitors, referred to those facilities in concluding his cross-examination of Mr Lynch in the continuing action by the businessman, his wife Eileen and their four children – Judith, Paul, Phillipa and Therese – against Allied Irish Banks and two firms of solicitors aimed at preventing the bank pursuing them over the €25 million loan advanced in February 2007 towards the purchase of 86 acres at Kilbarry, Waterford, for development purposes.

The family claims the loan was advanced on a non-recourse basis. It has also alleged negligence against two firms of solicitors – LK Shields and Matheson Ormsby Prentice – in relation to alleged advice concerning the deal and are claiming indemnities. The defendants deny the claims.

Yesterday, Mr Sreenan put it to Mr Lynch that during a meeting with solicitor Larry Shields in May 2009, Mr Lynch never made any reference to having phoned Conor Gunne, an associate of Mr Conlan’s, to make clear the AIB loan must be on a non-recourse basis.

Mr Lynch denied suggestions from Mr Sreenan that he hadn’t rung Mr Conlan some time in the week beginning January 8th, 2007, to tell Mr Conlan he would not agree to any condition requiring the loan to be a recourse loan.

Mr Lynch said he had not asked Mr Conlan about the terms being offered by AIB as Mr Conlan had said from the very beginning, when inviting Mr Lynch into the deal, there was nothing for Mr Lynch to worry about, Mr Conlan was a “prized client” of AIB and it would give him any money he wanted.

The Waterford deal was “a minor detail” in his life in early 2007 as there were a lot of other things going on then, he said. He had various professionals acting for him in relation to it and was awaiting the loan facility letter from AIB before he would sign up to anything.

The case continues.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times