Harvard Properties, which was hoping to make €£3.81 million from the Four Seasons Hotel in Ballsbridge, Co Dublin, may now make nothing from the development. The former chairman of ACC Bank, Mr Dan McGing, is among the company's directors.
The receiver appointed to the company, Mr Pearse Farrell of Farrell Grant Sparks, has sold the company's interest in the hotel at a cost below which the firm's owners would make any profit.
The company, the two directors of which are Mr McGing and Mr Barry Kenny, had a deal whereby it could buy part of the top floor of the hotel building for €11.43 million upon completion.
It also had a deal with Mr Derek Quinlan, who represents the current owners of the hotel, to sell the top floor to him for €15.24 million.
However it is understood the receiver to Harvard, Mr Farrell, has sold Harvard's interest to Mr Quinlan for about €7.62 million. Mr Farrell was not available for comment.
Mr Peter Donnelly, a partner in the Quinlan Partnership, which represents the owners of the hotel, said the Harvard interest had been sold on by the receiver at the value of the finished works at the time of the deal.
It is understood that Mr Kenny, the principal individual behind Harvard Properties, is unhappy with the sale and is considering his position. Mr McGing, a non-executive director of Harvard, did not wish to comment on the development.
Harvard Properties and Simmonscourt Holdings were placed in receivership after the costs for the completion of the luxury hotel went over budget in a situation where the partnership represented by Mr Quinlan had a contract to buy the finished hotel for a fixed price.
The banks which were funding the development were ACC Bank, Scotia Bank, Bank of Scotland Ireland and Anglo Irish Bank. ACC Bank, which was the lead bank in the deal, is being sued in relation to the matter but has said it will vigorously defend any action taken.
It is not clear if the case will ever go ahead. Following the appointment of Mr Farrell a number of the parties involved had to make a contribution towards completing the hotel.
The Four Seasons group made a contribution as did the consortium which now owns the hotel. The banks involved also took a hit.
Accounts filed recently by Stoneyview, one of Mr Quinlan's companies, show that it bought Harvard's interest during 2001 and disposed of this interest to the Nollaig Partnership, the consortium which now owns the hotel.
The partnership is a group of more than 20 professional and business people, including Mr Mark Kavanagh, Ms Fidelma Macken, Mr Dermot Gleeson, Mr Lar Bradshaw, Mr Donal Geaney and Mr Quinlan. The members of the partnership are able to claim their investments against tax.
The Quinlan Partnership represents other Irish clients who own a newly-opened Four Seasons hotel in Prague in the Czech Republic. It also represents Irish clients who are in the process of opening a Four Seasons Hotel in Budapest, Hungary, which they are hoping will open next year. There are no tax breaks for investments in foreign hotels.
The partnership is mainly involved in representing Irish clients involved in property investment projects here and abroad and has more than 90 projects on its books. Mr Quinlan is an accountant and former inspector with the Revenue Commissioners.
