Case against businessmen over Odeon site is settled

AN ACTION in which an Isle of Man businessman sought summary judgment orders for €12 million against former Irish rugby manager Pat Whelan and another Limerick businessman over a loan for the proposed redevelopment of the Odeon Cinema site in London has been settled at the Commercial Court.

Frank Woods had brought separate proceedings against Mr Whelan, Hollybank, O’Connell Avenue, Limerick, and Patrick Chesser, Rossio, Newcastle, Castletroy, Co Limerick.

The summary judgment applications were due for hearing yesterday but, after talks between the sides, Mr Justice Bryan McMahon was told both cases had been compromised in identical terms. No details of the settlements were disclosed.

Mr Woods, Majestic Apartments, Onchan, Isle of Man, had sued Mr Whelan and Mr Chesser over their alleged failure to honour an agreement to provide securities related to a £10 million (€11 million) loan given for redevelopment of the Odeon Cinema site in London’s Leicester Square.

Both defendants are directors of Callerview Properties Ltd, Steamboat Quay, Dock Road, Limerick, and Mr Woods claimed, under a loan agreement of September 26th 2007, he advanced a £10 million loan to Callerview for the Odeon site redevelopment.

Under a further agreement of September 29th 2007, referred to as the Priorities Agreement, Mr Woods claimed he agreed with Callerview and Anglo Irish Bank Corporation the £10 million loan would be subordinated to existing banking facilities provided by Anglo to Callerview based on a facility letter of February 21st 2007.

As security for the loan, it is alleged Callerview executed a fixed charge over its assets at Ennis Road Retail Park, Limerick, that charge being second to one in Anglo’s favour. Callerview also allegedly agreed to arrange for the defendants to provide an equitable charge over their shares in Callerview.

It was further claimed both defendants provided personal guarantees as security for the loan. Mr Woods claimed his £10 million loan, plus £2 million interest, was repayable on September 30th 2008 but Callerview failed to repay it.

He claimed the defendants also failed to adhere to an agreement of November 2008 to provide him with a charge over their shares in two Luxembourg companies in which they have a substantial ownership stake if he did not call an “event of default” under the loan agreement or make a demand under the personal guarantees.

In related proceedings settled last October, Anglo had argued it has a priority claim related to the £10 million loan.