ACC BANK has secured summary judgment orders for more than €19 million against Independent Wexford TD and developer Mick Wallace and his company, M J Wallace Ltd, which is in receivership.
In court documents, the bank said the secured assets of the company would not realise sums sufficient to cover, “or substantially cover”, the money owed.
Mr Wallace attended the Commercial Court yesterday when ACC applied to Mr Justice Peter Kelly for the judgment orders. James Dwyer SC, for Mr Wallace, said the defendants had tried their best to co-operate with the bank and the situation was “regrettable”.
There were other creditors and the defendants could not resist the bank’s application, counsel added.
Mr Justice Kelly said the case was appropriate for transfer to the Commercial Court and he would enter judgment as sought in the sums of €19,166,680 against the company and Mr Wallace.
The order against the TD arises from his personal guarantees of loan facilities made between 2004 and 2008.
The judgment orders were sought by Alison Keirse, for the bank, who said payments had been made under some of the facilities and the defendants had been co-operative with the bank.
A good working relationship between the bank and defendants was in place in 2009 and 2010 and an agreed structure was in place to reduce the debts, counsel said. This changed later in 2010 when the bank received a report on the financial status of the company indicating it was seriously insolvent. The bank appointed a receiver in May 2011 and later decided to issue the court proceedings.
When Mr Justice Kelly asked was ACC concerned other creditors may seek to move against the defendants, Ms Keirse said she had no firm instructions in that regard but other actions might occur as a result of ACC’s move.
Declan Taite of FGS was appointed by ACC last May to a range of Mr Wallace’s assets, including the Italian Quarter on Ormond Quay; the Behan Square apartment complex on Russell Street near Croke Park; a site on the North Circular Road, Dublin; and development land in Rathgar. The bank had fixed charges on those assets.
Mr Wallace has previously said he owes €40 million to various banks. These are understood to include Ulster Bank, AIB and Bank of Scotland Ireland, as well as ACC.
ACC’s case related to loan facilities issued between June 2004 and April 2008. Each of the loans was personally guaranteed by Mr Wallace in his capacity as director and promoter of the business.
Payments were made under two of the facilities from drawdown until late 2010, while the progress of the other three loans was linked to the developments for which they were provided, the bank said.
The Russell Street development was completed but while it was generating an income, that was not sufficient to discharge the borrowings in full, the bank said.
Two of the loan facilities also related to sites at Rathgar and North Circular Road which did not reach completion, it added.
It said it had agreed an approach with the defendants to manage rental income from completed sites, and that approach was pursued during 2009 and 2010. ACC said it wished later in 2010 to adopt a further strategy for generating income from the secured assets. This involved an agent for sale and the company giving full discretion to the bank and its agents to sell the secured asset properties as the bank saw fit while also permitting the continued trading of the company.
In tandem with the sale strategy, the bank said it also sought an assignment of all rental income from the Italian Quarter and a first charge over an account into which all rental income connected with the property secured to the bank was lodged.
In March 2011, the bank said its concerns regarding the company worsened because financial accounts for 2009 and 2010 remained outstanding and there was consequently “a strong likelihood” of it being struck off the companies’ register.
The company also told the bank it had an outstanding Revenue bill of €1.4 million and trade creditors of about €1.8 million.
ACC then engaged accountants to review the business and their report, plus the company’s unwillingness to execute the proposed agent for sale agreement, led to the bank issuing demands for repayment to the company and Mr Wallace, under his guarantees, on May 16th last. The receiver was appointed the following day.
As of August 9th last, the sums due and owing by both defendants amounted to more than €19.16 million, plus continuing interest, ACC said.
