€86.5m judgment against developer over Anglo loans

A LIMERICK developer has consented to a judgment of more than €86.5 million being entered against him over unpaid property loans of more than €165 million made to his companies by Anglo Irish Bank.

The judgment order granted by Mr Justice Peter Kelly against Michael Daly yesterday is the largest entered against an individual at the Commercial Court.

In his defence to the bank’s proceedings, Mr Daly had claimed he was regarded by Anglo as a “favoured developer” in the midwest region, with “easy access” to senior figures in the bank, including Seán FitzPatrick and David Drumm.

He claimed he was actively encouraged by Anglo in 2006 and 2007 to undertake massive property developments with the assurance hundreds of millions of euro would be made available.

His companies spent more than €300 million on development projects, plus more than €100 million in projects in Germany, Mr Daly said.

In 2006 and 2007, Anglo was anxious the group make additional investments in Germany and David Drumm made it clear funds of up to €500 million were available, he alleged.

Mr Daly, of Dalmin, North Circular Road, Limerick, said he had relied on oral assurances from Anglo executives that personal guarantees provided by him over loans were secondary to security taken by the bank and would never be relied upon.

The bank however, failed to take proper security and its handling of securities was “a shambles”, he said.

Anglo argued the claims about Mr Daly’s access to senior Anglo executives were not relevant and described as “incredible” his claims relating to Anglo’s approach to the guarantees.

Last year, the proceedings against Mr Daly were sent to a full plenary hearing after the court ruled Mr Daly had made out an arguable defence.

The full hearing was listed for January 11th next but Anglo brought a preliminary motion seeking to strike out Mr Daly’s defence on grounds of failure to make discovery of documents.

That motion was due to be dealt with yesterday but Mr Justice Kelly was told by Brian Kennedy, for Anglo, that Mr Daly had e-mailed Anglo earlier indicating he was consenting to judgment in the sum sought.

Mr Daly confirmed he was consenting to judgment, plus costs and Mr Justice Kelly entered judgment in the sum of €86,543,769 against him.

Third-party proceedings by Mr Daly in which he made claims against a number of Limerick solicitors were also struck out, with costs against Mr Daly, after Mr Daly said he was not proceeding with those claims.

Anglo previously secured judgment orders against four solicitors arising from guarantees related to loans to companies and partnerships linked to the Fordmount Property Group.

Dermot O’Donovan, Michael Sherry and Aidan Frawley, all partners in the Limerick-based firm Dermot G O’Donovan and Partners, consented at the Commercial Court last month to judgment orders for €21.7 million against each of them.

A fourth partner in the firm, Thomas Dalton, previously consented to summary judgment against him for €21.4 million.

Mr O’Donovan, Mr Sherry and Mr Frawley had argued they had a defence to Anglo’s claim on grounds including that assurances were given by Anglo officials to Mr Daly their guarantees over certain loans would never be relied upon.

The three solicitors had claimed they believed the guarantees were “a box-ticking exercise” for Anglo’s credit committee and that Mr Daly had a special status with Anglo, having been taken on several golfing trips by the bank including one involving travel on the Orient Express.

Anglo had described the solicitors claims as “incredible” and argued, as experienced professional solicitors, they could not have genuinely believed the guarantees were unenforceable.

The proceedings arose from unpaid loans of more than €165 million advanced by Anglo to three companies in the Fordmount property group and two partnerships to buy lands and buildings in and around Limerick city and county for development.

When they were not repaid, the bank appointed a receiver over most of the assets of the companies. Under personal guarantees of various loans, the bank alleged Mr Daly was liable for €86 million while the four solicitors each had a €21 million liability.

MICHAEL DALY: PROFILE PROPERTY GROUP ONCE WORTH MORE THAN €100M

ONE OF Limerick’s most high-profile developers Michael Daly stepped down from the property empire that once earned him a spot on the Sunday Times Rich List, last year.

Established in 2004, the Fordmount Property Group once had a net worth in excess of €100 million.

The company delivered at least €300 million worth of landmark commercial developments in Limerick including the iconic 13-storey Riverpoint building close to the Shannon Bridge.

An accountant by profession, Mr Daly lives with his wife and daughters on Limerick’s North Circular Road, one of the city’s most sought-after addresses.

After initially setting up his own accountancy practice, he joined the Grant Thornton firm in Limerick. When he left the accountancy firm he set up a host of property companies.

In 2004 the Fordmount Property Group bought the Castletroy Park Hotel from US billionaire philanthropist Chuck Feeney for about €25 million.

The company was behind the construction of the Park retirement village in Castletroy, the redevelopment of Bedford Row and the five-star Savoy Hotel (formerly The Marriott).

Outside of Limerick, Daly has managed property in Munich, Germany, through Executive Investment Holdings, formerly known as Daly Capital Investments Ltd. Another associated company, Daly Capital Holdings Limited, was renamed as German Capital Investments Ltd.

However he has stepped down as both company secretary and company director from both of these firms also.

Daly announced his resignation as managing director of Fordmount on June 29th, 2009, which had included the position of MD of five property companies in Limerick: Fordmount Developments Ltd, Fordmount Developments (Savoy) Ltd, Fordmount Investments Ltd, Fordmount Property Group Ltd and Fordmount Retirement Villages Ltd.

Before his resignation, he had hoped to build a €20 million 10- screen cinema complex on Bedford Row and to redevelop the site of Limerick Boat Club on Wellesley Pier.

However the latter was refused planning permission by An Bord Pleanála.

KATHRYN HAYES