Developer sued by Irish Nationwide

One of the country’s largest 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 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 Roisin at 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, 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, Chale House, Parneel Street, Dublin, were admitted to the Commercial Court today by Mr Justice Peter Kelly.

The judge was told by Ciaran Lewis, for Mr Carroll and Aifca, 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 the INBS’ 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 to INBS 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 refinance loan facilities previously provided to it by Bank of Scotland (Ireland) Ltd and was also to enable Aifca purchase the entire share capital of Lowe Tavers (Tallaght) Ltd.

INBS claims the repayment of the loan facility was to be made on demand or within the two year period of the loan 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 with Mr Carroll and with Mr Sean Mooney of accounatcy firm KPMG, on December 8th 2008 when Mr Fingleton had reminded Mr Carroll 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 Allied Irish Bank and Bank of Scotdland (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.