Businessman 'cannot pay' €86m

A businessman being pursued by Anglo Irish Bank for €86 million judgment orders over unpaid development loans of almost twice that amount has said he cannot pay, Anglo has “appalling” security for the loans and he was never once asked in 25 years dealings with it and other banks to provide a statement of affairs.

Michael Daly told the Commercial Court Anglo is acting unfairly in suing only him under personal guarantees when it had not moved against a number of solicitors who, he alleged, were also involved in some of the deals and also provided guarantees but wanted their identities kept secret.

“The bank knew my personal guarantee were meaningless in the context of the level of business we were doing with them,” he added. There was “a blatant disregard” for security of the loans, he added.

Anglo has brought the proceedings over unpaid loans of more than €165 million advanced to three companies in the Limerick-based Fordham property group and two partnerships.

The loans were advanced to buy lands and buildings in and around Limerick city and county for development and sale/lease, including office, retails and residential units and retirement homes. When they were not repaid by December last, the bank appointed a receiver over most of the assets of the companies.

Mr Daly said his partners in “this project” were four partners in the law firm, Dermot G. O’Donovan & Partners (DGO’D), which firm was at all times the legal adviser to the Fordham property group and also his own personal legal adviser.

Any loans entered into by the partnerships were done so as partners and any guarantees were on the basis of five guarantors, he added. When his name appeared on mortgages, that was on behalf of the group “because DGO’D wanted to be hidden”.

“There are no circumstances in which I would have entered into a loan or a guarantee without the five of us being party to it,” he said. “I now find that I am the only one being summonsed in respect of the guarantees.” He needed time to get full legal advice on whether to join his partners to the case and whether he had a case for negligence relating to legal advice provided to him related to the guarantees.

“I don’t have €86 million and won’t be able to meet it so the implications for me are catastrophic”. Anglo, through the receiver, has control of the relevant assets and, in those circumstances, it was absolutely premature to be taking action against him for the gross amount due, he added.

He had signed guarantees on the basis of other security being put in place with the bank but five properties worth some €22,.5 million had not been taken in charge by the bank, he said. Given the “appalling security” for all of the loans, a blanket judgment against him was neither acceptable nor fair.

Representing himself, Mr Daly, “Dalmin”, North Circular Road, Limerick, said he was facing other proceedings and had been able to get lawyers to represent himself in those but did not believe he would have the money to defend this case.

Maurice Collins SC, for Anglo, said he was not going to even try to respond to the claims made and Mr Daly had never put those matters to the Bank in correspondence. It did not appear anthing said by Mr Daly constituted a defence and he should be provided with only a brief period to outline any defence, counsel added.

Mr Justice Peter Kelly told Mr Daly he should swear an affidavit setting out the issues he had raised and he adjourned the case to next month.

In its proceedings, Anglo claims Mr Daly was a director at all material times of Fordmount Property Group Ltd, (FPGL) Fordmount Developments Ltd (FDL) and Fordmount Developments (Savoy) Ltd (FDSL), all with registered offices in Limerick.

It also claims he was a 50 per cent partner of the Fordmount Partnership and the St Munchin’s House Partnership, both of Bishops Quay, Limerick. The other members in those parterships were Dermot O’Donovan, Michael Sherry, Aidan Frawley and Thomas Dalton, all of whom held a 12.5 per cent memberships.

Anglo claims more than €165 million is owed to it by the three companies and two partnerships arising from varius loans advanced to those. Under personal guarantees of various loans, the bank alleges Mr Daly has a liability for some €86 million of that debt.