Developers Pat Ryan and Phil Monahan have failed to get a High Court injunction to prevent a receiver selling a commercial property at Dublin's City Quay worth an estimated €60 million.
Mr Justice Michael Twomey said there was insufficient evidence for Mr Ryan's claim that a sale by the receiver might lead to a lesser price for the property than if sold by him and the partnerships which bought the property with a €17 million Anglo Irish Bank mortgage in 2003.
The property, comprising two sites, is situated at City Quay/Moss Street/Gloucester Street area. It was bought by Mr Ryan, Mr Monahan and a number of other developers through two partnerships, with the Anglo funding. The loans and related security were assigned to Dengrove DAC in 2017.
There was a dispute between Mr Ryan and Dengrove over whether the mortgages assigned to Dengrove were security for just the borrowings of the partnerships in relation to the acquisition of the City Quay land, or whether they were also security for all the other borrowings of the partners to Anglo/Dengrove, a figure of around €440 million.
A High Court hearing took place in October 2019 in relation to that dispute and, following talks after the case started, a settlement was agreed. That stated the property would be sold with Mr Ryan getting 20.8 per cent of the proceeds (his share as a partner) and a “contribution sum” of €376,000.
The balance would be used by Dengrove to discharge borrowings in order to release the security it holds over the land.
Mr Monahan, a plaintiff with Mr Ryan in the injunction case, was not a party to that settlement but says he is entitled to benefit from its terms.
There followed a dispute with Mr Ryan over whether the partnerships would handle the sale arrangements or whether it would be done by what is known as “mortgagee in possession”.
On June 25th last, Dengrove appointed Ken Tyrell as receiver. Within days Mr Ryan and Mr Monahan got an interim injunction preventing the sale, which they sought to have continued pending their main action claiming it was unlawful for the receiver to sell in light of the October 2019 settlement agreement. Dengrove sought to have the injunction discharged.
Mr Justice Twomey, in his judgment on Thursday, concluded that an injunction preventing the receiver from selling the site should not be granted.
Reasons for this included that it was a commercial property, not a family home, and money secured on it was owing for over a decade.
The balance of justice favoured Dengrove or its assignee selling the site and discharging the secured borrowings, he said.
The judge also said no compelling evidence had been provided that a commercial/development site such as this in Dublin 2 would be sold at undervalue if sold by the receiver rather than by the partnerships.
Even if this were established at the trial, no compelling evidence had been adduced to convince the court that Dengrove would not be able to meet an award of damages for the alleged undervalue if it was sold by the receiver prior to the hearing of the main action, he said.
