A SUM of £22.8 million sterling is to be repaid to Mr Larry Goodman and three of his companies by a Co Tipperary farmer, Mr Joseph Kenny, following a High Court judgment yesterday.
Mr Goodman and 1st ABP Holdings Ltd, 2nd Anglo Beef Processors Ltd and Gemon Ltd, claimed that under a loan which they advanced to Mr Kenny, Fancroft, Roscrea, in March, 1990, the money was due to be repaid before June 13th, 1990, and was still owing.
Yesterday, Mr Justice Kinlen said he was satisfied the money was lent to Mr Kenny and was to be refunded to the lender. Accordingly, the court would enter judgment for £22.8 million sterling in favour of Mr Goodman and the companies against Mr Kenny. He fixed August 28th to deal with the question of interest and the question of a stay pending an appeal to the Supreme Court.
In his judgment, the judge said the proceedings started in September, 1990. Mr Goodman and originally ABP Holdings Ltd claimed the sum of £22,830,000 sterling was owed by Mr Kenny.
In a letter of March 13th, 1990, from Mr Kenny to Mr Goodman, Mr Kenny agreed to repay the sum on or before June 13th, 1990, to an account designated by Mr Goodman. Under the terms of the letter, it was provided that in consideration of the payment, Mr Kenny would require the return or cancellation of a promissory note of £25 million from Mercantile Credit, which purported to secure the advance of the loan. In 1994, Anglo Irish Beef Processors Ltd was added as a plaintiff and the na of ABP Holdings was changed to 1st ABP Holdings Ltd.
In an affidavit, Mr Tom Walsh, a group treasurer of the former Anglo Irish Beef Processors Group, said that in February 1990, he was approached by Mr Desmond Lamont of L & P Financial Trustees of Ireland Ltd on behalf of its client, Mr Kenny. Mr Lamont told him Mr Kenny was a representative of property investors in Ireland with a property portfolio in the Republic worth £25 million and that the investors; wished to use that portfolio as security to consummate a property transaction offshore.
Mr Lamont had said Mercantile Credit Company of Ireland Ltd was holding the title deed to the property portfolio, that Mr Kenny required funds for three to four months and security in the form of a promissory note was to be provided. This was to be payable to a company in the AIBP group.
Mr Walsh said the sum of £22.8 million sterling was advanced by Mr Goodman with money obtained from ABP Holdings Ltd acting as his agent to a bank account nominated by Mr Kenny. On March 14th, 1990, they received a formal acknowledgment signed by Mr Kenny that the money was repayable to Mr Goodman before June, 1990.
It transpired that no security was provided by Mercantile Credit. The money was dissipated and Mr Kenny failed to repay it.
In an affidavit, Mr Kenny said it was a precondition of any liability on his part that any monies advanced should be paid into a bank account which he would designate and the loan secured by a promissory note from a financial institution.
He said neither of these conditions was fulfilled for reasons beyond his control. Mr Goodman and the companies neglected to obtain security which had been agreed and "recklessly advanced" the funds without any security. They did not lodge the funds into a bank account designated by him but recklessly paid it into some other bank account.
The only consideration for him agreeing to pay £23 million sterling was that the promissory note would be returned or cancelled, which did not happen.
Mr Kenny said he was informed that by deed of assignment dated June 21st, 1990, Mr Goodman shad assigned the alleged debt and all interest due to a company called Gemon Ltd.
Mr Justice Kinlen said Mr Kenny said in another affidavit, that in 1990-91 proceedings were brought in Cyprus relative to money allegedly lent to him by Mr Goodman and it was revealed Mr Goodman had assigned all his rights concerning the debt to Gemon. He contended the information provided in Cyprus contradicted what was being told to the court here.
Mr Goodman, in an affidavit, said the transaction was structured in such a way that he was to become the holder of the promissory note to be provided for the loan. He said the sum was never repaid and the promissory note was never issued or received. However, the majority of the funds advanced was subsequently traced to Cyprus.
The court had been concerned about the proceedings in Paphos, Cyprus. Alleged monies were apparently frozen in a Cypriot bank. It was desirable that the same course of action should not be pursued simultaneously in two separate jurisdictions.
The judge said Mr Kenny stated the money was never received. He claimed it was not released into his control but apparently into the control of a South African Cypriot who spirited the money away. It was eventually traced to a bank account in the Bank of Cyprus.
Mr Kenny claimed that three days of a court hearing in Cyprus in April, 1996, were a "virtual catastrophe for Mr Goodman and his companies". In an affidavit, Ms Caroline Preston, solicitor for Mr Goodman, said she did not accept the proceedings were a catastrophe for them. She believed the outcome was ultimately a rejection of Mr Kenny's attempts to intervene in the proceedings.