Bid to stop Treasury 'spoiling' sale

An Allied Irish Banks trust company has initiated High Court proceedings seeking to stop development company Treasury Holdings "spoiling" a proposed €64 million sale of the majority shareholding in the Northside Shopping Centre in Coolock, Dublin.

The case of BNY Trust Company (Ireland) and Ark Life Assurance Company against Treasury Holdings was admitted by Mr Justice Peter Kelly yesterday into the list of the Commercial Court, the commercial division of the High Court, and was fixed for hearing on June 21st next.

BNY claims it is the beneficial owner of 78.6 per cent of the Northside Shopping Centre and that Treasury Holdings is the beneficial owner of 21.4 per cent, having purchased the interest of Peter Conlan. The freehold of the centre was held in trust by Percy Nominees Ltd for both it and Mr Conlan, subject to a 99-year lease from October 1976 held by N1 Property Developments.

BNY claims that it, Ark Life and Mr Conlan in November 1998 entered into a co-ownership agreement with AIB Investment Managers which included provisions governing the sale by one party of its interest in the centre.

The agreement was intended, the plaintiffs say, to give some protection to Mr Conlan by allowing him to join in any sale of the majority interest in the centre but not interfering with AIB and Ark's ability to deal in their majority interest in the centre.

Discussions took place last year relating to the sale of their interests in the shopping centre. In November 2006, the plaintiffs claim that a notice under the terms of the 1998 agreement was served on N1 Property Developments by Percy Nominees, with the agreement of Mr Conlan, offering N1 the opportunity to buy the freehold interest in the centre.

After negotiations, N1 made an offer of €81.75 million for the freehold interest.

Mr Conlan was notified in January 2007 that this equated to some €17.5 million for his share and that Allied Irish Property Fund and Ark Life were strongly recommending acceptance of this offer.

Mr Conlan responded in late January that he had received a higher offer for his interest and did not wish the trustees to sell at the price offered by N1. He asked that the freehold interest be offered for sale on the open market for the best available price. In line with the 1998 agreement, an offer under which N1 would buy Mr Conlan's share for €18,050,000 was made on February 14th, 2007. However, it appeared Mr Conlan agreed on March 29th, 2007, to sell his share to Treasury Holdings and that sale was completed on April 5th last.

The plaintiffs say Treasury Holdings was not entitled to benefit from the agreement. However, its claims meant the sale of the plaintiffs' interest could not be completed and they wanted declarations from the court that Treasury Holdings has no rights under the 1998 agreement.

Martin Hayden SC, for Treasury Holdings,said February 14th last was "an extraordinary day in Dublin with everyone trying to get themselves into positions" and it was Treasury's claim that there was "a lack of bona fides" in that.