Anglo secures €15m judgment against financier McFadden

ANGLO IRISH Bank has secured judgment for more than €15 million against financier Niall McFadden over unpaid loans and related guarantees. The judgment orders were made under a settlement announced by Bernard Dunleavy, for Anglo, to Mr Justice Peter Kelly yesterday of proceedings brought by the bank against Mr McFadden.

The settlement came on the eve of a hearing, due to open today, as to whether Mr McFadden had an arguable defence to the bank’s claim on the basis of earlier negotiations and alleged agreements between the sides.

In earlier, separate proceedings against Mr McFadden, National Irish Bank is also seeking orders for some €15 million arising from loans and guarantees. Mr McFadden is resisting those orders.

Anglo brought its action over a loan facility letter of September 2008 for some €8 million under which it restructured an existing loan of Mr McFadden. It also made claims under a November 2008 guarantee and indemnity executed by Mr McFadden arising from a restructuring of the borrowings of Boundary Finance Ltd.

Anglo demanded payment under both facilities last October and initiated proceedings after payment was not received. It claimed summary judgment for €13.3 million plus the euro equivalents of £326,649 and $2.46 million.

Under yesterday’s settlement, the bank secured orders for judgment in those amounts, plus costs, against Mr McFadden.

The bank had claimed the facilities were repayable on demand. Without prejudice to that claim, it said the combined facilities were repayable according to a schedule of repayments, with the balance to be repaid by June 30th, 2010.

While Mr McFadden had made certain repayments, he had not adhered to the schedule and the bank was entitled to issue its demand, Anglo claimed.

When the matter was entered into the Commercial Court, Rossa Fanning, for Mr McFadden, had said his client and the bank had had negotiations on a standstill agreement and there was an oral agreement last July related to the loan facilities. The negotiations broke down last October and it was Mr McFadden’s case the conditions imposed by the bank frustrated this oral agreement.

It was not disputed the money was owed but Mr McFadden contended the bank was stopped from bringing the case arising from its agreement in July to forbear, counsel said. There were sufficient resources available to the bank to keep the facility up to date but it had blocked Mr McFadden’s ability to deal with his accounts.

The separate NIB cases against Mr McFadden, to be heard early next year, arose after Mr McFadden put together a deal in 2007 to purchase the Buy Sell classified ads business.

Naldin Ltd was incorporated to buy the business from Associated Newspapers for €21.3 million in a deal funded by NIB. After Naldin was unable to raise equity finance, the business ran into difficulties.