Nationwide says Carroll liable for €60m debt

ONE OF the State’s largest property developers, Liam Carroll, is being personally sued for €60 million by Irish Nationwide Building Society arising from guarantees over loans made to his company, Aifca Ltd.

Mr Carroll allegedly told former INBS chief executive Michael Fingleton in late 2008 that he could deal with €30 million of the guarantee in 2009 and had also confirmed Allied Irish Bank and Bank of Scotland (Ireland) had the largest exposure arising from his developments.

A statement of affairs for Mr Carroll and his wife Róisín on October 31st, 2008, supplied to INBS had shown assets of €259.5 million, bank debt of some €149 million, annual rental income of €9.85 million and annual interest of €7.9 million.

INBS said that despite subsequent “engagements” by Mr Carroll and his agent to value properties in which Mr Carroll had an interest and the provision of information about other loans due to other lending institutions on properties related to Mr Carroll or Aifca, neither Mr Carroll nor Aifca had committed to making the payments due to INBS.

The proceedings by INBS against Mr Carroll and Aifca, Upper Mount Street, Dublin, were admitted to the Commercial Court yesterday by Mr Justice Peter Kelly.

The judge was told by Ciarán Lewis, for Mr Carroll and Aifca, that he would be contending that the guarantee under which the INBS is claiming €60 million from his client had expired because a certain security was put in place meaning the guarantee was for a lesser amount of €30 million.

Noting there was unlikely to be a dispute about the principal amount due by Aifca while there may be issues on interest, the judge fixed for hearing on July 17th next Nationwide’s application for summary judgment for the amounts sought.

In its proceedings, INBS claims Mr Carroll had executed an “irrevocable and unconditional” guarantee on September 29th, 2006, guaranteeing payment of all liabilities of Aifca up to €60 million.

On the basis of that guarantee and subject to the terms of a commercial mortgage agreement, INBS claims it granted and maintained a term loan facility to Aifca for €66.5 million and that some €78.6 million was now due and owing by Aifca under that facility.

It claims the facility allowed Aifca to refinance loan facilities previously provided to it by Bank of Scotland (Ireland) Ltd and was also to enable Aifca to purchase the entire share capital of Lowe Taverns (Tallaght) Ltd. INBS claims the repayment of the loan was to be made on demand or within two years, but Aifca and Mr Carroll had failed to repay the monies.

In an affidavit, Tom McMenamin, commercial lending manager with INBS, said the society had in letters of January 30th and April 14th last called on Mr Carroll to repay the €60 million sum. He said some €78.6 million, including interest to date, was now due and owing by Aifca.

Mr McMenamin said he and Mr Fingleton had met Mr Carroll and Seán Mooney of accountancy firm KPMG, on December 8th, 2008, when Mr Fingleton had reminded Mr Carroll that the loan facility guaranteed by him had expired some two months previously.

Mr McMenamin said Mr Carroll had said he could deal with €30 million of the guarantee in 2009. He said Mr Carroll had also confirmed that Allied Irish Bank and Bank of Scotland (Ireland) Ltd had the largest exposure arising from his developments and he needed their support to resolve his problems.

Mr McMenamin said Mr Carroll was pressed for details of his assets and liabilities and Mr Mooney had promised to provide personal statements in reply to those requests.

A statement of affairs was later provided.