A bank has brought legal proceedings against two Co Kildare men seeking repayment of €7 million allegedly guaranteed by them in relation to a share purchase agreement with a company involved in the proposed purchase of a 55-acre land bank in Co Offaly.
Mr Justice Peter Kelly was told yesterday that agents for the Irish branch of Investec (UK) Limited had sought three times last week to serve documents at the padlocked premises of Tony and Dermot McAuliffe at Furze, Co Kildare, without success.
The judge said he would deem service of the documents to be good and would admit the proceedings to the list of the Commercial Court with liberty to the defendants to apply.
Investec claims it entered into an agreement last February with French Furze Holdings Ltd under which it agreed to lend that company €8.825 million, repayable upon demand. It claims the monies were advanced upon certain terms and conditions and were to assist French Furze with the acquisition of a land bank in Tullamore.
It claims several types of security were put in place and that French Furze executed a legal charge over its property on March 6th. The defendants, who were the owners of the shares in the company, had both guaranteed the obligations of the company to Investec and had executed charges over their shares in French Furze to Investec, it is claimed.
Investec claims the defendants executed a security assignment under which they assisgned the interest in a share purchase agreement of February 16th, 2007 between them and Conway Clarke Properties Ltd of the entire share capital in French Furze.
The bank claims the share purchase agreement involved the payment of a €7 million deposit and a total consideraion of €17 million for the share capital in French Furze. That agreement was to have been completed on March 30th but this did not happen.
Investec claims the completion date was extended to October 21st and that Conway Clarke had acknowledged that if the sale had not completed by then, the €7 million deposit would be forfeit.
Investec claims it agreed to extend the final repayment date to October 31st. However, the share purchase agreement had not closed and French Furze remained indebted to Investec, it claims.
Demands for repayments were issued and, as the monies were not paid, Investec was exercising its rights under the security assignment. Investec claims it is entitled to rescind the share purchase agreement and that the deposit of €7 million paid by Conway Clarke to the defendants is forfeit.
However, the defendants had not forwarded the €7 million to Investec and had not replied to correspondence.