A DISPUTE related to the treatment of assets and liabilities of the €400 million estate of the late developer Liam Maye, whose company Castlethorn Construction built the Dundrum Town Centre, has come before the Commercial Court.
Bernard Costelloe, who was involved in various ventures with Mr Maye before his death in May last year, wants orders requiring Anne Maye, in her capacity as personal representative of her late husband’s estate, to honour an agreement concerning treatment of assets and liabilities.
Mr Justice Peter Kelly, after being told the sides were prepared to meet each other, yesterday transferred the case to the Commercial Court list. He adjourned the case to next month.
Mr Costelloe, Greenfield Road, Mount Merrion, Dublin, alleges that the sides agreed in August 2008 that he would transfer his interest in certain assets and properties in return for a payment of €2 million, plus the assumption by the estate of various liabilities.
He said the assets included corporate shareholdings and properties in Ireland, the US and Europe while the liabilities included certain bank loans.
Pending finalisation of the agreement, he claims it was agreed the estate would indemnify him relating to loans of some €400 million. Mr Costelloe claims he was paid the agreed €2 million, resigned as a director of various boards and executed documents for sale or transfer of interests in the various properties covered by the agreement.
However, he alleges Ms Maye has failed to procure his release from various liabilities referred to in the agreement, including loan accounts and mortgages with Anglo Irish Bank and Irish Nationwide Building Society.
The failure to indemnify him properly in litigation related to claims due under loan accounts had left a cloud hanging over him, he said.
He claims Ms Maye’s advisers had told him the matters could not be progressed quickly because of the current economic difficulties. He believed there was no desire to perform the agreement fully any more. He was also concerned there “may be a specific policy of cherry-picking the assets for sale while allowing the other assets to perhaps be passed on to the National Assets Management Agency”.
Ms Maye, he believed, had “very significant assets” at her disposal to meet his claim. He estimated property at St James’s in England alone, while mortgaged, would have realised close to €50 million.
Mr Costelloe alleges €2.87 million fell due on June 1st last under a guarantee provided by himself and Mr Maye over borrowings of Depton Ltd but was not discharged until after legal proceedings were taken, including proceedings by himself.
On July 15th last, he received a final demand from AIB for €5.75 million under a loan account. While Ms Maye had, through solicitors, indicated he could rely on the indemnity, she had not discharged that sum or secured his formal release from liability, he said.
In an affidavit, Anne Maye, Plunkett Avenue, Westminster Road, Foxrock, Dublin, said the bid by Mr Costelloe to transfer the case to the Commercial Court was premature, given efforts by the sides to address issues. It was “absolutely incorrect” to allege primary assets were being “cherrypicked and sold”, she said.
She referred to an apartment at Dock Mill, Barrow Street, Dublin, sold for €480,000 with that entire sum being sent to the lender. Another apartment at The Phillimore, London, was sold for £1.2 million which, after payment of fees, left a surplus of £102,633.
A house in France, the Villa Dom Perignon, was sold for €1.33 million last September, resulting in a surplus of €31,000 after fees. After the proceeds of sale of other premises at James’s Street, London, were lodged with INBS, there was a shortfall of £3.6 million.
PROFILE: LIAM MAYE
LIAM MAYE, who died in May 2008 at the age of 64, was one of the founding directors and shareholders of Castlethorn Construction, along with fellow Longford men Joe O'Reilly and John Fitzsimons. It is believed that Maye held 40 per cent of the company's equity.
Founded during the depressed mid-1980s, within a decade Castlethorn had become one of the State's largest and most dynamic building firms. It was also one of the few that put an emphasis on quality development, from the very outset.
From a fairly modest beginning with the Whitethorn estate in Palmerstown, Dublin, they went on to build a number of outstanding schemes including Holmwood in Cabinteely, Avoca Park off Avoca Avenue, Blackrock, and Beaumont Woods on the north side of Dublin.
The company's biggest break in its early years was the purchase in 1991, for about €6 million, of a development site at Carysfort College in Blackrock. A huge marketing campaign resulted in the houses it built at Carysfort Park selling fast for good prices.
Later, when it built Avoca Park (a name borrowed from nearby Avoca Avenue), a unique selling point was the involvement of four design teams in fitting out the houses using only quality Irish materials, in an initiative branded as "Irish by Design" by Joe O'Reilly.
In September 1999, O'Reilly and Maye were named by the Longford Leader (along with Jimmy Flynn of Flynn and O'Flaherty and Michael Whelan of Maplewood Homes) – as being among the builders who controlled 7,000 acres of zoned housing land in the Dublin area.
Among the housing schemes highlighted on Castlethorn's website are Riverwood, Fernleigh and Woodbrook in Castleknock; Stationcourt in Coolmine; Ivy Court and Beaumont Woods in Beaumont; Carysfort Park and Avoca Park in Blackrock, and Holmwood in Cabinteely.
The firm is also involved in developing Adamstown, in west Dublin, although building work has slowed because of the downturn – it was Castlethorn's misfortune that Adamstown came on stream just as the market took a nosedive.
It is better known, however, as the developer of Dundrum Town Centre, which is to be substantially enlarged over the next few years. Its success and O'Reilly's subsequent investments in the Ilac Centre and Swords Pavilions led to him being dubbed "Mr Shopping Centre".
Like O'Reilly, Maye shunned publicity. He was particularly proud of the country club development at Killeen Castle, Co Meath, a golf resort that cost Castlethorn a fortune. Maye was also a keen golfer and spent a lot of time in Spain, where he died.
FRANK McDONALD
