THE OWNERS of Kinnitty Castle Hotel in Co Offaly have taken High Court proceedings to remove the bank-appointed receiver to the premises.
Cornelius Ryan, Pipers Cottage, Kinnitty, and Kathleen Seret-Ryan, with an address in the Algarve, Portugal, have brought the action against KBC Bank Ireland (formerly IIB Bank) and Declan Taite of Farrell Grant Sparks, Bride Street, Dublin.
Mr Taite was appointed last month as receiver and manager of Kinnitty Castle, which employs some 70 people.
Mr Ryan claims the bank acted prematurely in calling in loans and was not entitled to appoint Mr Taite as receiver because he is "clearly conflicted". Mr Ryan alleged a partner in his firm had previously bid for Kinnitty Castle.
Mr Taite has denied those claims and said his partner intends to present an affidavit to the court to clarify the situation.
The case was admitted to the Commercial Court yesterday by Mr Justice Peter Kelly and will be heard at a later date.
The Ryans want court orders restraining Mr Taite acting as receiver; compelling the defendants to obtain court approval for any offer below €10 million for the property; and ensuring proper marketing of the property.
They are also seeking orders preventing the tender process for the sale of Kinnitty Castle from concluding on January 9th. They want the tender to continue to a date no earlier than February 2009.
Mr Justice Kelly adjourned to next week a hearing of the Ryans' application for an injunction restraining the continuation of the tender process pending the outcome of the full action.
In an affidavit, Mr Ryan said he bought the hotel in 1994 and mortgaged the property to IIB bank in 2004 for €5,871,000. He owes the bank more than €6 million. He said a deal to sell the property for €12.6 million in 2006 had fallen through, but he had been trying to sell the property since then and had agreed to a tendering process to conclude on November 27th.
He said the hotel was valued at €9 million and offers of €10 million by a German consortium as well as other bids of €8 million and $12 million were made.
A "damaging newspaper article" of November 11th had incorrectly stated Kinnitty Castle had been sold for €11.6 million in 2006, he said. It also stated two estate agents had said the hotel could achieve a greatly reduced price between 30 per cent and 50 per cent less, which suggested the asking price was as low as €5.8 million. As a result, he had no option but to withdraw from the tendering process.
The bank decided to call in its loans and Mr Taite was appointed receiver, he said. Mr Ryan said he was surprised at that appointment because a partner of Mr Taite's, along with a hotelier, had visited the property in 2006 and was a bidder.
In his affidavit, Mr Taite said his partner had confirmed he never had, and does not have, any personal interest in the property. The partner said he met Mr Ryan in 2006 with a client for whom he was acting as a professional adviser. Mr Taite said no bid was made by his partner's client and Mr Ryan was using this "coincidence" to "distract".