Treacys Hotel Group had €8.5 million to redevelop the Ard Rí Hotel in Waterford when it offered to buy the now-vacant property in 2016, the High Court heard on Wednesday.
The group has gone to court to enforce a contract to buy the landmark Ard Rí, overlooking Waterford city, for €1.6 million, which the business says it agreed with US fund Cerberus on November 21st, 2016, when it paid a €160,000 non-refundable deposit and proved it had the cash to pay for the property.
According to an email read out in court on Wednesday, Andrew Geraghty of Cerberus’s advisers Capita told the US firm on November 22nd, 2016 that the Treacys’ representative, Bob Lanigan, had confirmed that the family had “a pot of €8.5 million” available to develop the hotel.
Mr Geraghty was seeking proof of funds for Cerberus from Mr Lanigan. The Treacy family was unable to provide this until November 28th as the group’s accountant, Frank Wallace, was out of the office following a bereavement.
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Cerberus subsequently agreed to sell the hotel to rival bidder, businessman Seamus Walsh, for €1.5 million. The court heard that he had originally offered €1.25 million for the property on November 16th.
Treacy family member Maria Keena is asking the High Court to order Cerberus subsidiary Promontoria (Aran) Ltd and receiver Luke Charleton of EY – previously Ernst & Young – to complete the sale of the Ard Rí Hotel to the group.
Mr Geraghty had sought proof of funds within 48 hours on November 22nd. That was extended to the 25th, when Mr Lanigan told him that Mr Wallace would not be available until the 28th.
Mr Geraghty told the court that he informed Terry Byrne of Cerberus European Servicing Advisors (Ireland) Ltd of this on the 25th.
Martin Hayden SC, the Treacy Group’s lawyer, noted that Mr Byrne did not tell Mr Lanigan that it was “not acceptable” to provide proof of funds on the 28th.
“Mr Lanigan’s position is that the 28th was acceptable,” Mr Hayden said. “You never went back [on November 25th] to say ‘it has to be today’.” Mr Geraghty indicated that that was a matter for Mr Byrne.
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Ms Keena maintains a receipt for the deposit signed on the night of November 21st by herself, Mr Lanigan and Chris Allen of EY, at the firm’s offices, is evidence of its agreement to buy the hotel for €1.6 million.
Darren Das, also of Capita – now BCM Global – told the court that paying a deposit was a statement of intent, not a final agreement. “It’s only an expression of interest,” he added.
Mr Das emailed Mr Allen on November 22nd, 2016 asking him not to lodge the Treacys’ bank draft as Capita was waiting on proof that they had the outstanding balance.
Mr Hayden pointed out that Mr Walsh had not paid any deposit or provided proof of funds by November 28th, but Cerberus decided to sell the property to him.
Mr Das maintained that it was only Promontoria (Aran) Ltd that ultimately made the decision on selling properties. Capita advised the firm, managed the assets, secured any income they generated and worked with the receiver.
The Cerberus subsidiary acquired the hotel when it bought a group of loans, dubbed Project Aran, from Ulster Bank. It appointed Mr Charleton as receiver to the Waterford property in 2016.
Mr Das said he prepared a credit paper on the basis of Mr Walsh’s original €1.25 million offer. In evidence he said that figure then marked the lowest amount for which Cerberus was prepared to sell the hotel.
He was also aware that Mr Lanigan expressed interest in buying the Ard Rí, but did not know who he was representing.
