The case between the Irish Permanent and its former managing director, Dr Edmund Farrell, has been settled, in a complex deal which gives Dr Farrell ownership of his Foxrock home and a pension, but also involves cash payments of £150,000 from him to the Irish Permanent.
The bank is also to get ownership of a condominium in Boston, valued at £100,000. The surprise sudden ending came on the third day of a case which had been predicted to run for up to three months. However, proceedings between Irish Permanent and financial consultant Mr Kelvin Smythe are to continue today. The terms of the settlement between Irish Permanent and Dr Farrell and his wife, Zora, were not revealed in court. However, it is understood that Irish Permanent has agreed to release an £800,000 pension fund built up for Dr Farrell. Dr Farrell and his wife will also retain their home, Grasmere, in Foxrock, Co Dublin.
Separately to the agreement reached yesterday, Dr and Mrs Farrell still face a charge of £218,000 plus interest on the Grasmere premises registered against them by Bank of Ireland in 1996. Under the terms of yesterday's agreement, Dr Farrell will pay Irish Permanent £50,000 immediately and a further £100,000 within five years. The latter payment would be triggered immediately if Grasmere was sold. Sources estimate that Grasmere and its land could be worth up to £2 million.
Irish Permanent will also take possession of a condominium in Boston which had been purchased with money that came from the society. It is believed to be valued at around £100,000. Each side in the settlement will pay its own costs. These are believed to amount to around £350,000 each. One driving force behind the settlement is likely to have been that, if the case had run its full length, the legal costs to each side could have climbed to £1.5 million.
Under the settlement, Irish Permanent will drop its claims against Dr Farrell and his wife, and Dr Farrell will abandon his unfair dismissal claim for £4.7 million.
The legal battle started four and a half years ago when Dr Farrell, a former managing director of the Irish Permanent building society, was dismissed by the society from his position of executive chairman. In court earlier this week, Irish Permanent alleged that a number of transactions entered into by Dr Farrell were devices used by him to extract large sums of money from the former building society.
Yesterday, in court, Dr Farrell's counsel said that his client had felt "ambushed" when these claims were outlined. He categorically denied any wrongdoing, his counsel, Mr James Nugent SC, said. He added that the settlement was to the satisfaction of both parties. Dr Farrell said little after the settlement was announced, but his solicitor, Mr Kirby Tarrant, speaking on his behalf, said the former managing director, "wanted to get on with his life".
As he left the Four Courts buildings, Dr Farrell and his wife were ushered along by their daughters and requests for comment were referred to Mr Tarrant.
He said Dr Farrell was glad the court had agreed that all the transactions mentioned in the proceedings were known about by the board of the Irish Permanent, at the time.
