Lynn plan to control companies by bearer shares

Solicitor Michael Lynn was reorganising the corporate structure behind his European property companies when the Law Society launched its investigation into his legal practice and property dealings in September, according to sources who had dealings with the solicitor. Simon Carswell, Finance Correspondent, reports.

Mr Lynn was setting up a parent company in Luxembourg for his European property companies with ownership of the parent company being held in bearer shares - certificates for which, in most cases, no records are kept showing who owns the shares.

Bearer shares are useful for investors or company directors who want to remain anonymous because no share register for the company is retained. Whoever physically holds all the bearer shares owns the company.

It is unclear whether Mr Lynn has completed the reorganisation of his companies.

According to sources who have had dealings with Mr Lynn in recent months, the solicitor said he was restructuring the corporate structure behind his European property business in recent months when the Law Society began investigating his Dublin legal practice in September. His business, Kendar, has been developing properties in Portugal, Slovakia, Bulgaria and Hungary.

Minutes of an emergency meeting of the Law Society's regulation of practice committee, which were included in a filing to the High Court, state that Mr Lynn was in Luxembourg on October 9th, the day of the meeting.

A court affidavit filed last month by Mr Lynn, shows a list of 154 bank accounts and 148 properties in Ireland and overseas. Some 107 properties are in Ireland with the remainder in countries including Portugal, Britain and the US.

Mr Lynn based the information in his affidavit on a report on his assets and liabilities that he commissioned Dublin accountants Grant Thornton to compile. It is not clear if the information included in his affidavit contains the full Grant Thornton report.

The firm wrote to Mr Lynn's legal representative, asking that the report be used in full or not at all in any court filing being made by Mr Lynn in the case taken against him by the Law Society. It is believed Grant Thornton did not include any detail on the Luxembourg parent company or the existence of bearer shares in its report because it could not independently verify the information.

Mr Lynn has already parted company with two legal teams; it is unclear if a third firm of solicitors, Merriman White in London, will be coming on record to represent him.

He had engaged the services of accountant Peter Stewart, of Dublin firm O'Donovan Stewart, to draw up a list of his assets and liabilities before he hired Grant Thornton to compile its report.

Mr Lynn was due to be cross-examined by the Law Society on his dealings on six properties over two days last week, but he failed to appear in court. The president of the High Court, Mr Justice Richard Johnson, made an order seeking his arrest.

Mr Lynn was in London earlier this month but his current whereabouts are not known. The High Court was told on Monday that Mr Lynn had contacted his wife, Bríd Murphy, in recent days, but she did not know where he was.

Ms Murphy is suing her husband and ACCBank for half the proceeds of Glenlion House in Howth, Co Dublin, though she has said there are "no marital difficulties" between the couple.

The Law Society's case has been adjourned until January 14th, but the court order seeking Mr Lynn's arrest is still in place. His assets have been valued at €52.4 million and he owes at least 11 financial institutions more than €80 million.

Danske Bank, trading as National Irish Bank, has issued proceedings against Mr Lynn and Fiona McAleenan practising under the style and title of Michael Lynn & Co and/or Capel Law.

The bank published a notice in today's Irish Times on the back of an order received in the High Court last Monday directing the publication of an advertisement as "good and sufficient service" of summons on Mr Lynn and Ms McAleenan. The bank issued the summons on December 7th.

In another case being taken by Permanent TSB against the two solicitors, Ms McAleenan, Bethaghstown Wood, Bettystown, Co Meath, has claimed that she was an employee of Michael Lynn & Co, not a partner.