Businessman who gave Drumm work in US sues bank alleging fraud
Co Meath native sues in US claiming Anglo fraudulently induced €10m guarantee
Michael Breslin’s action against IBRC centres on a claim that in 2009, after Drumm had left the bank, Anglo reneged on a October 2008 deal to fund a £63 million (€71 million) hotel on Waterloo Road in London. Photograph: Bryan O’Brien
Michael Breslin, the Kells, Co Meath native who built a fortune from scaffolding in New York, is suing Irish Bank Resolution Corporation, the State-owned entity that was formerly Anglo, in the courts in the US state of Delaware, where the bank’s American subsidiary is being wound up.
Mr Drumm worked as a consultant and adviser to Mr Breslin, who sold his scaffolding business Atlantic in 2011, and operated from an office at the New Jersey offices of the company, now known as Safway Atlantic, near New York City.
The former Anglo chief executive was jailed for six years by Dublin Circuit Criminal Court last week for fraudulently making the bank look €7.2 billion healthier than it was in September 2008.
Mr Breslin’s action against IBRC centres on a claim that in 2009, after Drumm had left the bank, Anglo reneged on a October 2008 deal to fund a £63 million (€71 million) hotel on Waterloo Road in London if he personally guaranteed the debt of Car Park Solutions, a Co Cavan company owned and controlled by his brother Barry.
“Mr Breslin reasonably believed that, despite the then-current worldwide financial crisis, Anglo had the financial ability to provide such financing, because Anglo had received at the end of September 2008 a guarantee from the government of the Republic of Ireland, ” he said in court papers last month.
“[He] reasonably relied on the reputation of Anglo of delivering on its assurances and representations of its funding commitments.”
Mr Breslin moved to the US in the mid-1980s and his family purchased Atlantic Hoisting and Scaffolding in 1988, turning it into one of the biggest scaffolding companies on the east coast. Among the major projects undertaken by it were the construction of Freedom Tower on the former site of the World Trade Centre and the installation of the famous Rockefeller Centre Christmas Tree.
Breach of performance
He alleges fraudulent inducement by Anglo of a £9.4 million guarantee on the loan and breach of performance by its successfor IBRC of a promise to release the guarantee in 2012.
The businessman and his wife Dolores sued IBRC that year to compel the bank to agree to an agreement he claims was reached to settle all his Anglo-related debts, including the personal guarantee, when he agreed to repay a €1.6 million mortgage early on another property in Co Meath.
The UK loan was transferred from IBRC to the State’s National Asset Management Agency, set up to take property loans out of the banks, and it secured a judgment of £9.4 million against him last year.
Mr Breslin was unable to overturn the judgment on appeal and he claims in the US action that the Nama Act may be blocking his claims where US law would not. As part of his action, Mr Breslin has sought an order from the Delaware court delaying the closure of IBRC’s US bankruptcy until his claims against it are resolved by either the Irish or US courts.
IBRC’s liquidators – Kieran Wallace and Eamonn Richardson of KPMG – are objecting to Mr Breslin’s action, claiming that he was attempting to “forum-shop” by seeking discovery in the US courts rather than the Irish courts and that his bid to delay the closure of IBRC’s bankruptcy was “premature”.
Mr Breslin told The Irish Times he was hoping his action would go to discovery in the US, “which we were refused in Ireland at all turns”. He directed further queries to his US attorney.
“He wants his day in court on the merits of his claims against IBRC and if he can’t get that in Ireland, he’d like to get that in the United States, ” said Mr Breslin’s lawyer Alec Ostrow. Both sides are in talks about scheduling the hearing of the action in August, he said.