AIB is entitled to summary judgment for sums totalling around €24 million against 12 business people over default on loans which they had guaranteed, a High Court judge has ruled.
A stay applies to January 15th to allow the defendants consider an appeal. The stay does not extend to one defendant, Sam Russell, who was not represented in court.
The 12, along with three others who previously came to an arrangement with the bank for a total of €2.5 million, gave personal guarantees of between €170,000 and €3.8 million on loans totalling €27 million made to a company in 2008.
AIB claimed all 15 were liable on a several basis with limited individual liability.
The 15 are shareholders in Blagnac Investments Ltd, an Irish registered company which holds the entire issued share capital in a Luxembourg registered company, Blagnac Investments Sarl.
This company in turn owns the entire share capital in 2 Rue Dieudonne Costes SAS, a company incorporated in France which owns the Radisson Blu Hotel on Rue Dieudonne Costes, Toulouse, France.
The money was loaned to the French registered company which was guaranteed and indemnified by the 15.
The loan was due to be repaid by September 29th 2013. After the company defaulted, the bank demanded repayment from the guarantors of a total of just over €27million, inclusive of interest, by July 20th, 2015, AIB said.
Despite demand letters, the defendants failed, refused or neglected to repay, it said.
The 12 were: Seamus O’Mahony, Old Chapel, Bandon, Co Cork (who had liability for around €2.3 million); Tom Kingston, Corran, Waterfall, Cork, and John Gaffney, Ballyleigh, Waterfall (who had joint liability for €3.89 million); Jeremiah Galvin, Lower Muckross Road, Killarney, Co Kerry (€1.69 million liability); Chris and Marina Kay, Dromderrig, Kinsale, Co Cork (€947,367); Barry Harte, Main Street, Timoleague, Co Cork (€1.15 million); Tim Smyth, Bridgewater,Crosshaven, Co Cork (€472,873); Sam Russell, Delford Drive, Rochestown, Cork (€472,873 also); Connor Phelan, Phelan’s Pharmacy, Carrigaline, Co Cork (€1.68 million); Brendan O’Shea, Rochfordstown, Waterfall, Cork (€1.68 million); and Mark O’Shea, Glendale Flowers, Waterfall (€1.68 million also).
The other three were: PJ Flynn, Castlewoods, Old Chapel, Bandon, who consented to judgment against him for €1.68 million last month; Donal Kelleher, Belfry Heights, Bandon, Co Cork, who guaranteed €170,000 and Ray Reidy, Greenfields, Ballincollig, Co Cork, who guaranteed €674,182. Mr Kelleher and Mr Reidy also came to an arrangement with the bank.
The 12 sought a full hearing of AIB’s claim for judgment against them arguing they had a defence to the claim.
In his judgment, Mr Justice Max Barrett refused to send the matter for full hearing and said AIB was entitled to summary judgment against the remaining 12.
He said the threshold for granting summary judgment was low.
The court, “though painfully conscious on a human level of the financial toll its conclusion may bring”, was regretfully coerced as a matter of law into granting summary judgment, he said.
