Couple in court over €71m judgment

A Dublin solicitor and his wife have appeared before the Commercial Court to be examined about their assets by a bank seeking…

A Dublin solicitor and his wife have appeared before the Commercial Court to be examined about their assets by a bank seeking to enforce a €71 million judgment against them arising from property investments

Brian O'Donnell and his wife Mary Patricia O'Donnell applied for bankruptcy in London last month as Bank of Ireland applied for an order to question them in the Commercial Court here over what the bank described as "alarming" discrepancies in statements about their assets.

The couple were in court today when the matter returned before Mr Justice Peter Kelly.

Begining his evidence today, Mr O'Donnell said the bank had been provided with detailed information about the assets and the couple had also hired an insolvency expert to deal with the bank's requests for information.

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The court also heard the couple contend their centre of main interests is England but the bank disputes that.

The bank had sued the O'Donnells, Gorse Hill, Vico Road, Killiney, arising from loans and guarantees on loans obtained for investments and for refinancing of other loans.

Under an earlier settlement, the bank was entitled to seek possession of their luxury family home at Gorse Hill, said to be worth between €6 million and €7 million, over failure to make repayments.

The couple came to an agreement in March last year, under a settlement with the bank, to make payments totalling €28.5 million by November but they did not do so.

When the payments were not made, the bank re-entered proceedings and Mr Justice Kelly last December granted the bank summary judgment orders against the couple and against three companies owned or controlled by them for about €71.5 million.

That has since risen to more than ?75m, the court heard.

On March 27th last, the bank was given permission to cross-examine the couple today about statements of affairs submitted by them to the bank to assist its efforts to identify assets which could be used to pay off their debt.

The bank said there were "alarming" discrepancies between a statement of affairs made in March 2011 and one of February last.

Last year, the couple had claimed part or full ownership of a significant international property portfolio in a statement concerning their net worth, Des Hanrahan, director of BoI's specialist property group said in an affidavit.

This included a property at Pennsylvania Avenue, Washington, of which they claimed 33.5 per cent ownership and which was sold on March 18th 2011 for US$155 million.

It also included a property at Westferry Circus, Canary Wharf, London, which they claimed full ownership of and another at Columbus Courtyard, also Canary Wharf, of which they claimed 74 per cent ownership.

There were two additional London properties, one at Barton Street which they said they owned in full and another at Sanctuary Building, in which they had a 31.5 per cent interest.

They also claimed ownerships, ranging from 50 to 100 per cent, of buildings at Courcheval in France, Merrion Square, Fitzwilliam Lane and Merchant's Arch in Dublin; and one at Stockholm, Sweden, bought for €285 million of which they said they owned 51 per cent.

Mr Hanrahan said the bank had questions arising from the sale of the Sanctuary Building on July 27th last. The couple had failed to engage with an accountant nominated by the the bank about this, he said.

The bank had then tried to find out about the $155m sale of the Pennsylvania Avenue property but was told by a firm of London solicitors representing the couple that sale "realised a very large capital loss," Mr Hanrahan said.

The defendants refused to answer questions asked of them about any benefits received from that sale, he said.

The bank received an updated statement of affairs on February 23rd last which "alarmingly" and for the first time was in direct contradiction of the statement given just under a year previously, he said.

The couple now claimed the Westferry Circus property was not in their 100 per cent ownership but that Mr O'Donnell is the sole shareholder in a company called Hibernia (2005) Ltd with that share held in trust for his son, Blake.

They also said they did not have 74 per cent of the Columbus Courtyard property but were registered shareholders of a company (Columbus Courtyard Ltd) of which the shares were also beneficially owned by Blake.

The Barton Street property was also not owned by them but they were in fact registered shareholders in a company called Vico Barton Ltd. Those shares were beneficially owned by Blake and his siblings, Bruce, Blaise and Alexandra O'Donnell.

The Stockholm property has been repossessed by a secured creditor in Sweden and is currently subject of litigation there, the couple had said.

The French property was subject to a planning problem which could substantially reduce realiseable proceeds, they also said.

Mr Hanrahan said there was further concern the couple was now saying the family home is owned by an Isle of Man company, Vico Ltd, whose shares are also beneficially owned by the four children.

Gorse Hill was valued at ?30m in 2006 but has a current value of between €6 million and €7 million, according to the O'Donnells.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times