Twenty seven people involved in a property partnership set-up to purchase development lands in Co Offaly are being sued for €3.48 million judgment orders at the Commercial Court.
Ulster Bank Ireland Ltd claims it is owed €3.48 million arising from a €3.7 million loan of 2008 to the partnership to purchase around 12-acres of land at Syngefield, Birr, Co Offaly for residential development.
In an affidavit for the bank, Joan Williams, an associate director of Global Restructuring Group (GRG) — Recoveries, said the most recent valuation of the land values it between €500,000 and €1million in a ‘fire sale’.
She said the ‘Birr Partnership’, whose investors were mainly Co Cork-based, had claimed a facility letter linked to the 2008 loan agreement meant the bank could only pursue the partnership for interest and not for the capital sum.
The bank denies those claims and contends it has full recourse to all the partners for capital and interest. The bank claims, when the partnership entered into the agreement, they believed it would be “very profitable” as they regarded he property as undervalued and with a potential value of €7.95 million.
Planning permission was granted for 159 houses and apartments on the site but no development ultimately materialised, it was stated.
The bank claims repayment of the entire loan became due on January 30th, 2009. It is now seeking judgment orders for the repayment of €3.48 million and contends the matter is urgent, alleging there is a risk the finances of those in the partnership will deteriorate.
The bank states it believes the partnership was set up by two solicitors who were also partners and acted as legal advisors to the partnership. While the original partnership agreement stated each of the partners would provide €50,000 in capital, the bank said it was not certain it was set up on that basis.
In transferring the case to the Commercial Court today, Mr Justice Peter Kelly noted there was a claim the solicitor members of the partnership had acted outside the scope of their authority in entering into the partnership agreement.
Martin Hayden SC, for the partnership, said he wanted time to take instructions related to the makeup of the partnership and concerning the issue of the authority of the solicitors involved.