US investment firm Digital Bridge, formerly known as Colony Capital, has threatened to appoint a receiver over assets of the Waterfront development on Dublin's north docklands over an alleged €317 million debt, the High Court has heard.
Developer Johnny Ronan’s Ronan Group Real Estate (RGRE) contends any move by ColEmerald 4 SARL, an affiliate of Digital Bridge, to appoint a receiver is unlawful, invalid and in “serious breach” of the Waterfront shareholder agreement and various other agreements.
On Friday, a temporary injunction restraining any steps to appoint a receiver was continued to Tuesday next when an application to fast-track RGRE’s action against Digital Bridge will come before the Commercial Court.
Digital Bridge and RGRE are joint venture partners in the planned development of Waterfront, a commercial and residential scheme that would see more than 1,000 new homes and 66,718sq m of office space developed in Dublin’s north docklands overlooking the Liffey.
While the office scheme secured planning permission in August, An Bord Pleanála refused in May to grant approval for the planned residential element, comprising two 40-plus storey towers.
Wider dispute
The legal action stems from a wider dispute between RGRE and Digital Bridge, which owns 70 per cent of the Waterfront development, after the US group decided in June to wrap its share of their wider Irish joint ventures in a sale of $2.7 billion (€2.3 billion) of international property assets to New York-based Fortress Investment Group.
Under the deal, due to be completed later this year, Fortress is to take ownership of Digital Bridge’s joint stakes with RGRE in Waterfront.
On Tuesday, RGRE and four related companies – RGRE Devco 1 Ltd, Waterside Westwick Ltd, Spencer Place Ltd and Tesson Ltd – initiated High Court proceedings aimed at preventing the appointment of a receiver over the Waterfront assets. They also secured an interim injunction, returnable to Friday, restraining that appointment.
The defendants are Digital Bridge Inc, ColEmerald 4 SARL, ColEmerald 5 SARL, Aquela Ltd, ColDocklands Holdings SARL, Galoa Ltd, Waterside Block 9 Developments Ltd and Waterside Devco 1 Ltd.
The court heard, arising from a letter of demand served last Monday, ColEmerald 4 SARL had threatened to appoint a receiver over the assets in the Waterfront development.
In that letter, it was alleged that a facility agreement between Waterside Block 9 Developments Ltd as borrower, and ColEmerald 4 SARL as lender was repayable in full on September 15th, 2021. It was alleged the facility had not been repaid, an event of default had occurred and, at close of business on September 15th, 2021, some €316.9 million was owing.
The letter demanded repayment of that sum by 4pm on October 12th, 2021, failing which it was stated all of ColEmerald 4’s rights, including to appoint a receiver, may be exercised.
RGRE claims the move to appoint a receiver is unlawful and invalid and is a means of “expropriating” its interest in the Waterfront development.
Interim order
On Friday, the interim order was continued by Mr Justice Senan Allen to next Tuesday to allow the RGRE side apply for a fast-track hearing in the Commercial Court.
Later on Friday, having heard from James Doherty SC, for the RGRE side, and from Lyndon MacCann SC, with Kelly Smith SC, for the Digital Bridge side, Mr Justice Denis McDonald, who manages the Commercial Court list, agreed to hear the fast-track application on Tuesday.
Outlining the case, Mr Doherty said the letter of demand sought repayment of just under €317 million arising from facility agreement of 2018, which was part of a suite of wider contractual documents.
His side says the service of demand was unlawful and in breach of shareholder and joint venture agreements and payment arrangement. Those claims were contested by the defendants.
Mr MacCann, for the Digital Bridge side, said they supported the application for an urgent hearing in the Commercial Court.
His case was that there is “confusion” concerning the obligations under the relevant agreements and that the debt should have been repaid some time ago.
Mr MacCann also said his side was concerned the value of the assets involved was not sufficient to meet the debt in full. While an undertaking for damages was provided by RGRE when seeking the injunction, his side wondered “if that has any worth”.
