ANGLO IRISH Bank has withdrawn a Commercial Court summary judgment application for €44.8 million against hotelier Hugh O’Regan, developer Paddy Kelly and another man arising out of a loan for the purchase of the Morrison Hotel in Dublin.

Rossa Fanning, for the bank, told Mr Justice Peter Kelly yesterday it was withdrawing the application to enter the case into the Commercial Court list because “certain developments” had occurred in the past week, including a decision by the court last Wednesday.

Counsel was referring to the judge’s decision, in separate proceedings by Anglo, to grant summary judgment for more than €37.4 million against Mr O’Regan arising from his own unpaid personal borrowings of €11.3 million and his personal guarantees over €26.2 million loans to two of his companies, Thomas Read Holdings and Clubko Ltd.

In relation to that case, the judge was told yesterday Mr O’Regan is now accepting the bank’s calculation of interest due on the €37 million sum and a final summary judgment order for some €37,581,704 was therefore granted by the court against Mr O’Regan.

That case arose from Mr O’Regan’s personal borrowings under a December 2007 loan facility advanced by Anglo and his guarantees over loans given the same month by Anglo to Thomas Read Holdings and Clubko Ltd, a wholly owned subsidiary of Thomas Read Holdings, now in liquidation.

In September last, Anglo demanded repayment of all sums.

The Morrison proceedings withdrawn yesterday related to a separate loan granted in 2006 to a trading business, the “Morrison Co-Ownership”, which used finance from Anglo to buy and extend the Morrison and to refinance existing finance on the hotel. In its proceedings, Anglo alleged Mr O’Regan owed it €35.8 million, Mr Kelly owed €4.48 million and a third man, Patrick Dunning, also owed €4.48 million, arising from the original €41.5 million loan which by July last had risen to €44.8 million, partly because of then daily interest charges of €5,596.

Each man was liable to the bank in proportion to the percentage holding, which was 80 per cent for Mr O’Regan and 10 per cent each for the other two, Anglo claimed.

On July 23rd last, the bank demanded immediate repayment of the entire loan, which by then had risen to €43.4 million, exclusive of interest and other costs.

The money was not repaid and a receiver was appointed to the Morrison Hotel.

Separate proceedings have been initiated by the receiver for €3.7 million in rent arrears allegedly owed by the firm operating the hotel, the Morrison Hotel Ltd.

Anglo v O'Regan: dispute outlined

COURT PAPERS submitted by hotelier Hugh O’Regan in the €37.58 million action against him by Anglo Irish Bank show how the bank’s attitude to one of its biggest customers changed dramatically last year, as the bank teetered on the brink of collapse at the height of the financial crisis.

Mr O’Regan said in the papers that he enjoyed a good banking relationship with Anglo for more than 15 years until late 2008. The relationship broke down over his purchase of the Hibernian and United Services Club premises at 8 St Stephen’s Green, he said.

Mr O’Regan had planned to turn Clubko, the company behind the building, into “a not-for-profit charitable club” to promote discussion for “the relief of poverty, the advancement of education and other works of a charitable nature beneficial to the community”.

The club would be the city- based centre for a larger educational base that he was developing in Kilternan, south Co Dublin.

The bank had earlier agreed to lend €26.335 million, but on September 10th, 2008, offered a smaller loan of €22.5 million.

“The atmosphere within the bank in September and October 2008 was frenetic and filled with panic,” he said in an affidavit.

Mr O’Regan said he believed that this was in no small part due to the pressure being exerted on Anglo as a result of turbulence in the global financial markets and to the continued focus at the time on the bank’s liquidity, share dealings and its falling share price.

It was only when he threatened to sue the bank as a last resort that it allowed drawdown of a reduced loan but on substantially different terms, which the bank knew would put him and his companies under serious financial pressure, he said.

“The plaintiff [Anglo], having originally been supportive of me for over 15 years, suddenly changed its attitude towards me and became hostile.”

Mr O’Regan’s views on the bank’s wider predicament in late 2008 did not prevent the bank securing judgment against him over his borrowings.

Mr O’Regan yesterday had a court judgment of €37.58 million confirmed against him by State- owned Anglo Irish Bank arising from loans provided to him over a number of commercial properties in Dublin.

The High Court lifted a stay on an order from last week allowing the bank to secure judgment for the loans and associated interest owing by the businessman.

A separate action to transfer another case against Mr O’Regan and developer Paddy Kelly to the Commercial Court did not proceed yesterday due to the judgment. The case related to the Morrison Hotel in Dublin.

SIMON CARSWELL