Wife of bankrupt developer says she owns frozen €1m

The wife of discharged bankrupt developer Larry O’Mahony has secured court orders allowing the family living expenses of €9,000 a month out of some €1 million in frozen monies pending a

High Court

decision whether State-owned

Irish Bank Resolution Corporation

has any claim to them.

Christine Connolly claims she owns the money from which the expenses are being paid and insists she has no liability to IBRC. She claims some €315,000 of the €1 million in frozen monies represent the proceeds of sale of a house in Portugal which she bought with her own money for €420,000 and she has no involvement in her husband's business dealings.

She needed the court to sanction the living expenses as she would otherwise be unable to get rented accommodation for her family when they had to leave their home on Dublin’s Shrewsbury Road on December 1st following its repossession by Nama, she said in affidavits.

Mr Justice George Birmingham said he considered €9,000 was appropriate. He also noted the sides had agreed that a sum of about €67,000 should be paid out to meet some of her legal costs, without prejudice to IBRC's right to dispute that payment later.

Full proceedings
He reserved other costs issues for determination after the hearing of the full proceedings and adjourned to January.

IBRC has sued Portal Properties LLC, Ms Connolly and Mr O'Mahony arising from a loan for some €2.5 million allegedly advanced to Portal from 2006 by Irish Nationwide Building Society (since taken over by IBRC) to buy a luxury property at Pinheiros Altos, Almancil, Portugal. The full hearing is expected to take place next year.

IBRC alleges the couple effectively controlled Portal and allegedly induced INBS to enter into a loan agreement on foot of fraudulent and/or negligent misrepresentations.

IBRC claims part of the security for the €2.5 million loan was an undertaking related to sale proceeds of the luxury property, plus an alleged undertaking by Ms Connolly over sale proceeds of an adjoining property she owned.

Both properties have been sold and the proceeds are frozen pending the court action.

The net sale proceeds of the luxury property were about €785,000 while those of the adjoining property, which Ms Connolly claims she bought for €420,000 with her own money, are some €315,000.

About €39,000 in living expenses paid to her since June has been deducted from the €315,000 proceeds, leaving about €276,000 in that account. The further expenses will be taken from that account.

Ms Connolly claims Mr O'Mahony decided to buy the Portuguese luxury property as a holiday home for his family from a previous marriage. Mr O'Mahony had an "intricate" business relationship with Michael Fingleton of INBS and had told her Mr Fingleton sanctioned the €2.5 million loan, she claims.

When the loan issued, INBS knew Portal already owned the luxury property, she alleges.