Two brothers have consented to judgment for some €7.5m being entered against them in favour of Allied Irish Banks under their guarantees of loans made to their development company.

That company, H2 Developments Ltd, had difficulty selling apartments at Bastion Quay, The Docks, Athlone, due to the decline in the property market and flooding near the development, AIB said in court documents.

A solicitor representing Conor Heavey, Bán Uisce Bay, Athlone and David Heavey, Bastion Quay, told Mr Justice Brian McGovern at the Commercial Court on Monday his clients were consenting to judgment as sought by the bank.

The proceedings arose on foot of guarantees, limited to €10.2 million, provided in 2007 by both brothers concerning liabilities of H2 Developments, of whch both are directors and 50 per cent shareholders.

The company was incorporated to develop a residential apartment block and marina berth known as Bastion Quay.

Loans

The bank had in 2009 advanced loans to H2 for purposes including refinancing existing facilities and to complete construction of the Bastion Quay development. AIB also in 2009 made available a personal facility of some €692,000 to the brothers.

The bank said construction had progressed at Bastion Quay but the company and defendants had difficulties selling apartmentws due to the decline in the property market and flooding near Bastion Quay.

The bank said it had engaged with the brothers over a number of years in relation to adressing the company’s indebtedness.

However, two proposals for purchase of the loans by third parties collapsed and the brothers had refused to accept a new restructuring proposals on the terms proposed by the bank, it said.

By February last, some €7.4 million was outstanding under the facilities advanced to H2, the bank said. After the company failed to repay, the bank sought repayment of some €7.4 million from the brothers under their guarantees, plus €76,628 outstanding under the personal facility.

When repayment was not made, AIB issued its legal proceedings seeking judgment against the brothers for some €7.5m.