Irish rugby star Paul O’Connell is among more than 60 investors pursuing former Irish rugby manager Pat Whelan and Limerick businessman Pat Chesser in an effort to recover €13.4 million “mezzanine” finance provided for a property development at London’s Earls Court.
It is alleged Mr O’Connell invested some €100,000 in the scheme, while other investors, most with addresses in Limerick but also including persons from counties Dublin, Kilkenny, Clare and Meath, invested sums between €50,000 and €300,000. It appears several of the investors, including Mr O’Connell, invested monies from their individual pension schemes.
The proceedings were admitted to the Commercial Court today by Mr Justice Peter Kelly who agreed to adjourn them for several weeks to facilitate talks between the sides.
Seeking the adjournment, Frank Callanan SC, for a number of investors, said a proposal had been made to his clients which they wished to consider.
Mr Justice Kelly has admitted three sets of proceedings by various individual investors and companies to the Commercial Court, all arising from a proposed property development at Earl’s Court, London.
The case is against Pat Whelan, Hollybank, O’Connell Avenue, Limerick, and Pat Chesser, Rossio, Newcastle, Castletroy, Co Limerick, and relates to the raising between March 2007 and April 2008 of “mezzanine” finance of some €13.4 million for property development.
The proceedings involving Mr O’Connell are also against Steamboat Developments Ltd (SDL), Dock Road, Limerick, in addition to Mr Whelan and Mr Chesser. The plaintiffs in that case include 11 individuals who have brought the action jointly with Wealth Options Trustees Ltd in their capacity as trustees of their individual pension schemes.
Davy Crest Nominees Ltd is also a plaintiff in that case and has brought the action jointly with Mr O’Connell in his capacity as trustee of Mr O’Connell’s individual pension scheme.
In that case, it is alleged Mr O’Connell was among a number of individuals who invested a total of €1.841 million of the overall sum of €13.4 million. It is alleged Mr O’Connell invested a sum of €100,000.
It is claimed, in exchange for the €1.84 million sum, SDL issued loan note certificates. It is alleged those loan notes were to rank equally as an unsecured obligation of Steamboat and the instrument under which they were issued was binding on Steamboat. That instrument provided the loan notes would carry an interest rate of 16 per cent per year on the principal sum.
It is claimed all loan notes were to be repaid together on the second anniversary of the date of the investment, plus any unpaid interest that had accrued. Further agreements allegedly ultimately provided for repayment to be made on December 18th 2009, but the defendants failed to pay, it is claimed.
In the other two sets of proceedings, it is alleged, in consideration of the monies raised, Mr Whelan and Mr Chesser entered into various agreements with investors, including the Steamboat Partnership Agreement and the PCP Partnership Agreements, which gave some investors the option to require the defendants to acquire the investors' share within a period of some two years.
It is claimed a later agreement of July 17th 2009 provided for repayment of monies on September 11th 2009. That date was allegedly extended by agreement several times until a final date of December 18th 2009. On January 22nd 2010, solicitors for the investors wrote to the defendants seeking payment but the sums due were not paid, it is claimed.
