Lynch loan claim 'very big ask', judge told

ASKING THE Commercial Court to accept claims by businessman Philip Lynch and his family they would have walked away from a land deal had they believed they could be pursued individually for the €25 million loan was “a very big ask”, a judge was told yesterday.

The Lynch family’s account of their signing up on February 8th, 2007, to a €25 million AIB loan with developer Gerry Conlan for the land deal in Waterford was not credible and contained “glaring omissions” and “multiple inconsistencies”, Paul Sreenan SC, for LK Shields Solicitors, argued.

Counsel was making closing submissions for LK Shields which, along with AIB and another law firm, Matheson Ormsby Prentice, is being sued by Mr Lynch, his wife Eileen and four children in an effort to avoid AIB pursuing them over the loan.

The family allege the defendants were negligent and contend they are entitled to be indemnified against any claim by AIB against them. The defendants deny the claims. AIB contends the loan had full recourse to all borrowers and is counterclaiming for €25 million judgment orders against the Lynchs and, in separate proceedings, against Mr Conlan.

Evidence ended last month and Mr Justice Michael Peart is hearing closing submissions.

The final loan facility document was signed on February 8th, 2007, by Judith Whelan, daughter of Mr Lynch, on behalf of the family. An earlier draft facility contained a special condition providing for recourse to Philip Lynch and Mr Conlan but that was removed from the final loan facility with the effect, AIB claims, of giving it recourse to all borrowers.

Yesterday, Mr Sreenan said Mr Lynch had claimed, were it not for assurances given by solicitors the deal was non-recourse, he would have walked away from the deal.

That claim had to be considered in circumstances including the absence of documents stipulating the requirement for the deal to be non-recourse, the fact Mr Lynch had already paid a €2.5 million non-refundable deposit and his saying he did not understand what non-recourse was, counsel said.

The claim also arose in circumstances where, before the family heard from LK Shields, Mr Lynch had told his family days earlier there was no risk attached to the deal, Mr Sreenan added. Up to February 7th, 2007, Mr Conlan had failed to arrange non-recourse terms with AIB for the €25 million loan which terms, Mr Lynch had argued, Mr Conlan was obliged to arrange, counsel said.