FORMER IRISH Nationwide Building Society chief executive Michael Fingleton, a Fianna Fáil Senator and two developers are opposing a bid to fast-track a legal action against them over unpaid property loans of some €13.5 million.
Ulster Bank has brought the case against Mr Fingleton, Liskillen, Shankill, Co Dublin; Fianna Fáil Senator Francis O’Brien, Corwillan, Latton, Castleblayney, Co Monaghan; and two Monaghan property developers, Noel Mulligan, Moyles, Castleshane, and Charles McGuinness, Tully House, Monaghan.
The case relates to an alleged €13.2 million loan facility of July 2006 advanced to the four to purchase a 50-acre site at Swellan Upper and Lower, Farnham Road, Cavan. The loan was secured on the site and Ulster Bank claims the facility was repayable on demand at all times.
The bank says it agreed in June 2008 to increase the loan facility so as to provide for an interest roll-up and that, in June last year, the amount outstanding under the loan was €13.5 million.
The bank served a demand for repayment in June for the total sum but that has not been repaid, it said. While it had since collectively and individually met the defendants and had received a number of proposals, none of those proposals were acceptable, Ted Mahon, a manager at Ulster Bank Group Centre, said in an affidavit.
It then issued the legal proceedings.
The four defendants yesterday opposed the bank’s application to have the case transferred to the Commercial Court, which fast-tracks business disputes. Rossa Fanning, for Mr Fingleton, said the bank’s own loan documents stated the bank would continue the facility just until December 2008. While documents stated there was to be a review in August 2008, there was no evidence of any review or what had occurred in December 2008, he said.
There was “a wall of silence” for 18 months after December 2008 until a letter of demand was issued during the summer which he contended was just an opening salvo before negotiations, counsel said.
For a facility to have expired 18 months prior to a demand for repayment being issued was “the antithesis of urgency”, he added.
Counsel for the other three defendants endorsed Mr Fanning’s arguments and said the court was being asked to find the matter was urgent simply because of the amount of money involved. Interest repayments were being fully serviced, he added.
Mr Justice Peter Kelly said a letter of demand was issued on June 9th last but he wanted to know why there was a delay since December 2008. If the bank did nothing, did not seek to renegotiate and had just let the facility lie, that was not indicative of any urgency. The judge said he would grant an application by counsel for the bank to be allowed file an affidavit in reply to the arguments made by the defendants against transfer. He adjourned the application for transfer of the proceedings for two weeks to allow the affidavit be filed.
Mr O’Brien, a dairy farmer, has been a Senator since 1989 and was elected from the agricultural panel. He was a member of Monaghan County Council from 1979 until 2003 and chairman of the council from 1986 to 1987. He owns a large amount of property in Cavan and Monaghan.
