THE COMMERCIAL Court has reserved judgment on the action by businessman Philip Lynch and his family aimed at preventing AIB pursuing them for repayment of a €25 million loan to buy development lands in Waterford.
The case opened last December and evidence ended last month after which legal submissions were heard over six days. When those submissions concluded yesterday, Mr Justice Michael Peart said he was reserving judgment on the 27-day hearing. The judge did not indicate when judgment would be given but, given the length of the action and the issues involved, it is expected to take some time. The legal costs of the case are expected to amount to several million euro.
Mr Lynch, his wife and four children – Judith, Philippa, Therese and Paul – have sued AIB and two law firms, LK Shields and Matheson Ormsby Prentice, in an effort to avoid AIB pursuing them over the €25 million 2007 loan. The loan was issued to the family and developer Gerry Conlan to buy 86 acres at Kilbarry, Co Waterford, for development. The bank has brought separate proceedings against Mr Conlan over the loan.
The final loan document was signed on February 8th, 2007, by Judith Whelan, daughter of Mr Lynch, on behalf of the family, the court previously heard.
An earlier draft facility contained a special condition providing for recourse to Mr Lynch and Mr Conlan but that condition was removed from the final loan facility. This had the effect, AIB claimed, of giving it recourse to all borrowers for the €25 million.
The Lynch family claimed they always understood the loan would involve AIB having no recourse to them individually and its recourse would be limited to the lands. The court heard the land value has been put at €4 million compared to €80 million in 2007.
The family alleged the defendants were negligent in relation to how they dealt with the loan and claimed they are entitled to be indemnified against any claim by AIB against them for repayment.
The defendants denied those claims. AIB contended the loan was full-recourse to all borrowers and has counterclaimed for a €25 million judgment against the Lynchs.
In final submissions yesterday, Brian O’Moore, for the family, said Mr Conlan seemed to be one of the richest people in Ireland and “a titan of Irish business” at the time of the loan. He was said to have a net worth of €190 million but also had borrowings of more than €250 million when AIB’s own policy suggested a €114 million limit. Mr Lynch’s reliance on Mr Conlan getting a non-recourse loan was “totally rational” as Mr Lynch believed Mr Conlan was “in with AIB” and trusted him to deliver a non-recourse loan, Mr O’Moore said.
