SIMON CARSWELL,
Finance Correspondent
THE LAW Society's case against missing solicitor Michael Lynn may have reached some conclusion, with the High Court ordering him to be struck off the solicitors' roll and to pay €2 million in fines. However, there are a multitude of legal actions outstanding against him taken by banks and investors that have still some way to run.
Some 130 sets of legal proceedings have been issued against Mr Lynn, with lenders issuing multiple writs over loans totalling more than €80 million.
He also owes substantial millions to investors who paid deposits for properties in his developments in Portugal, Bulgaria, Hungary and Slovakia. Most actions by investors have yet to be heard by the courts.
Legal proceedings have been taken against him by 11 Irish banks and building societies.
Anglo Irish Bank and Bank of Scotland (Ireland) secured loans of €13 million and €10 million respectively with first legal charges against many of his 107 Irish properties and they moved quickly to recover some of their money by selling the properties.
However, other financial institutions had little or no security for their loans given that Mr Lynn had drawn borrowings on the basis of undertakings provided by him or his law practice that the loans would be secured against the properties at a later date. Most never were.
These institutions were left exposed on their debts when Mr Lynn's law practice and European property business collapsed last October, and since then have been scrambling to register judgments against him, using the fast-track process in the Commercial Court, a division of the High Court, to obtain security on their debts.
Most have converted these into mortgage judgments, enabling them to make claims against his properties and, where possible, seek court permission to sell. In most cases, however, they have joined the queue behind banks which have the strongest security, first charges, against the properties.
A four-day court hearing will start on Tuesday to decide whether the €4.9 million proceeds from the sale of Mr Lynn's Glenlion House in Howth, Co Dublin, will be divided among three lenders who gave loans totalling €11.7 million to buy the house, even though it only cost him €5.5 million. ACC Bank has a charge on the house. Mr Lynn's wife, Bríd Murphy, has also made a claim against the property.
In July, Irish Life & Permanent's case against Fiona McAleenan, a solicitor in Mr Lynn's law practice, is scheduled to run for eight days. The company claims Ms McAleenan signed undertakings on loans provided to Mr Lynn. She is contesting.
The known liabilities of Mr Lynn and fellow solicitor Thomas Byrne, who was struck off and fined €1 million on Thursday, now total about €140 million.
Mr Lynn has failed to appear for High Court hearings since he disappeared last December. The outstanding cases against him will progress in his absence.