Value of Maye's estate should have rung 'alarm bells'

THE ESTATE of the late property developer Liam Maye, whose company built the Dundrum Town Centre, was valued at just €72,000 in June 2008, a month after his death, the Commercial Court heard yesterday.

Mr Justice Peter Kelly said that “extraordinary” valuation should have resulted in “alarm bells” ringing a lot earlier for Allied Irish Banks, allegedly owed €58 million by Mr Maye under various loans and guarantees. Mr Maye was engaged in property development and speculation and the estate was of “great complexity”.

Mr Justice Peter Kelly made the remarks when dealing with the bank’s bid to have its action fast-tracked by the Commercial Court.

AIB has brought proceedings against Anne Maye, widow of Mr Maye, (in her capacity as executor of the Maye estate), Mayeco Properties Ltd and others over various loans and guarantees.

The AIB loans are being reviewed by the National Assets Management Agency as to their eligibility for being taken over by the agency, the court also heard.

The facilities included a €57 million loan to Mayeco Properties Ltd to buy a block at the Sweepstakes in Ballsbridge, Dublin.

AIB lending manager Brendan Hanratty said it had previously received periodic statements indicating Mr Maye had a minimum net worth of €100 million.

Just last May the bank saw an affidavit of the Revenue, sworn by his widow, indicating a gross value of €72,000 for the estate on foot of which a grant of probate was issued for the estate on June 12th, 2008.

That affidavit was given to the bank by Bernard Somers, of Somers Associates Chartered Accountants, on behalf of the Maye estate at the request of AIB’s solicitors and indicated a gross value of €72,000 for the estate (comprised of cars/boats), and a net value of €53,299, Mr Hanratty said, also in an affidavit.

Mr Somers had informed AIB’s solicitors he understood Mr Maye was involved in a number of property transactions at the time of his death and, in those circumstances, it was agreed with the Revenue that its affidavit would be sufficient to enable a grant of probate to be obtained.

AIB had “grave concerns” about the explanation given by Mr Somers for the “most unusual” process whereby the grant of probate was extracted, Mr Hanratty said.

The matter caused such “significant disquiet” on the part of the bank and its lawyers it had decided to bring proceedings as a matter of urgency.

The bank had held many meetings and discussions with the Maye estate and its advisers, including Warren Private Clients and Mr Somers, about possible debt restructuring. However the estate advanced “unacceptable proposals” and the bank had significant concerns about its ability to meet its liabilities.

Refusing the bank’s application to have its case fast-tracked, Mr Justice Kelly said it was only in April that AIB had issued the proceedings and it was only now, on the last motion day of the legal year, that it was seeking to have the proceedings transferred to the Commercial Court.

The bank had failed to show the necessary urgency to merit transfer and the case would have to proceed through the ordinary High Court list, he ruled.

Damian Keaney, for AIB, said the bank had not wished to adopt a “sledgehammer” approach immediately after Mr Maye’s death and it was legally entitled to issue proceedings up to two years after death.

After Mr Maye’s death, he added, AIB had sought and secured confirmation that indemnities executed in its favour by Mr Maye against various loans would continue to operate against his estate.

That, and periodic statements about Mr Maye’s net worth, had caused AIB to be generally satisfied its position was protected.

From the end of 2008 and well into 2009, it had dealt with numerous requests from BCM Hanby Wallace solicitors, acting for the Maye estate, and there were also several face-to-face meetings with representatives of the Maye family and the estate, particularly Warren Private Clients, which represented the interests of the estate, he said.