Challenge lost to €1.7m judgment over loans to buy hotel

Two businessmen have lost their challenge to a €1.7 million judgment against them over unpaid loans issued to buy a hotel/restaurant in Doolin, Co Clare.

The Court of Appeal upheld the High Court judgment against John Flanagan and Gerard Lillis over loans made by Bank of Ireland in 2006 for the Tír Gan Ean House Hotel.

The men claimed they had an arguable defence to the bank’s claim, entitling them to a full hearing of their case and the judgment should be set aside.

Among their claims was that the bank failed to put in place security over the guesthouse liquor licence, bought for €170,000.

‘Receivership’

The Court of Appeal said the fact the licence “disappeared within a receivership” cannot be laid at the door of the bank, the court said.

It rejected other grounds advanced by the men including their claim that the bank misrepresented the loans for the purposes of regulation by State authorities and that it was expressly agreed loan repayments would be made from the trading profits of the hotel/restaurant.

It dismissed further claims there was no formal event of default on repayments or that the bank had not notified them of default.