Hoteliers ordered to repay €2m loan

A BANK has secured a court order requiring two men to repay loans of some €2 million secured on the Old Mill Hotel in Julianstown in Co Meath, which was later destroyed by fire.

However, Mr Justice Peter Kelly agreed to put a stay on registration and execution of the order for judgment against Michael Durkin, of Cois Inbhir, Donabate, Co Dublin, and John Lynch, of Kalyn House, Beaulieu, Drogheda, Co Louth, until October next to allow for the sale of the property.

He said he would consider a further stay from October depending on the progress of separate proceedings in which Mr Durkin and Mr Lynch are challenging the repudiation of policies of insurance for the premises.

Patrick Leonard, for Bank of Ireland, indicated the bank would consent to a stay for purposes of selling the lands on which the hotel was located. The bank claimed it had advanced loans to the defendants in 2004 to allow them refinance existing borrowings related to the hotel, to fund renovations and to buy out the interest of their co-owners.

The bank claimed the defendants had defaulted on loan repayments from February 2006 and that a material change had occurred in that the hotel, which secured the loan, had been destroyed by fire, was no longer in business and the insurers were refusing to indemnify.

The bank sought repayment of the loans in April last but repayment had not been made, it said.

Counsel for the defendants said the premises had been insured for €1.4 million.