A BUSINESSMAN has sued financial advisers BDO, claiming he has suffered financial ruin as a result of acting on alleged negligent advice to buy for €17.5 million the Chief O’Neill hotel and property complex in Smithfield, Dublin.
Laurence Byrne claims he had assets of more than €19 million prior to buying the complex but suffered total losses of some €14 million and is being actively pursued by banks for some €10.7 million. He and his family are living on about €3,000 a month, he added.
The investment was risky, was actively managed by BDO and required Mr Byrne to take on debt of €14.8 million and inject equity of €3.7 million, representing more than his net worth, it is claimed. Had correct advice been given, he would not have entered it, it is also alleged.
At a meeting in November 2011 with Peter Carroll of BDO concerning his debts, Mr Byrne said he had told Mr Carroll he considered Mr Carroll responsible for “the disaster that I had lived with for five years, which has caused me untold stress and has resulted in my suffering a brain haemorrhage in 2006 and a stroke immediately thereafter”.
In an affidavit, Mr Byrne (50), a father of two, Mount Wolseley House, Tullow, Co Carlow, said BDO had recommended in 2005 he invest in the complex consisting of the Chief O’Neill Hotel, Ceol Music Shop, Jameson Observation Tower and that Water Tank Office Building.
Due to poor performance of the hotel, he later had no option but to sell the complex and it was ultimately sold for €8.5 million in October 2009, he said.
He had since learned the defendants were previously involved in the complex, developed about 1998, Mr Byrne said. At the time he was approached to purchase it, he understood BDO was continuing to act for the consortium which had acquired the complex and leased it back to the developers.
At the very least, his purchase of a put-and-call option meant BDO was receiving a commission and/or reward from an interested third party but that was not disclosed to him at the time, he said.
The proceedings, brought against BDO Simpson Xavier, now BDO, Mercer Street Lower, Dublin 2, were transferred to the Commercial Court list yesterday by Mr Justice Peter Kelly on the application of Denis McDonald SC, for Mr Byrne, and on consent of BDO.
