AIB pursues Cork developer over €26m loan guarantees

CORK BUSINESSMAN and developer John Fleming is being pursued by AIB bank for €26 million summary judgment orders over guarantees of loans to Fleming Energy to buy a majority shareholding in a US energy company.

Mr Justice Peter Kelly transferred the case to the Commercial Court yesterday and listed it for Friday so that Mr Fleming’s lawyers could outline the basis of any defence.

Bill Shipsey SC, for AIB, said the bank did not believe Mr Fleming had any defence but Sarah McKechnie, for the defendant, said she needed time to take instructions.

The claim arises from a guarantee allegedly executed by Mr Fleming, now said to be living in Billericay, Essex, England, on May 20th, 2008, of all liabilities of Fleming Energy (with registered offices at New Cork Road, Bandon, Co Cork) to AIB to a maximum of €26 million.

AIB claims the guarantee was part of the security provided for credit facilities it advanced to Fleming Energy, part of a group of companies controlled and operated by Mr Fleming. Fleming Energy is a subsidiary of the JJ Fleming group of companies.

It is claimed the main loan given to Fleming Energy was for $32.4 million, given in June 2007, to help buy a 51 per cent shareholding in Plymouth Energy, a company registered in the US.

It is claimed that while Fleming Energy had paid off sums due under two letters of credit, the primary loan facility was undischarged and $32.8 million was due by Fleming Energy. It is also alleged the company owes an additional €1.26 million.

AIB said it had agreed not to demand repayment while companies in the Fleming group were under court protection but that protection ended last March. Also in March, the bank issued a demand under Mr Fleming’s guarantee and some €25.9 million was now due, it claims.

In March the High Court appointed Tom Kavanagh, of Kavanagh Fennell, as liquidator to three insolvent companies in the Fleming building group, which has debts of more than €1 billion, following the Supreme Court’s decision to end court protection.