A business partnership involving broadcaster Gay Byrne has secured injunctions restraining a fund-appointed receiver dealing with its €13.5 million investment property in Dublin.
Ms Justice Isobel Kennedy granted the orders at the High Court on Friday to the Firstwood Partnership, pending a full hearing of its case against Launceston Property Finance.
Rossa Fanning SC, for the partnership, had argued the fund “contrived” a default last year on a fully-performing 20-year loan made to the partnership.
The fund in 2014 acquired that loan, taken out by the partnership in 2000 with Anglo Irish Bank to acquire the property – a block of offices, retail units and car park at St Andrew's Lane. The loan is due to expire in 2020.
The injunctions allow the partnership to continue servicing the loan as agreed with Anglo, including an amortisation schedule for repayments. The terms include the partnership collecting rents for the property and using those to service the loan, tax and other liabilities.
The judge ruled the partnership was entitled to the orders because it had raised a fair question to be tried, including on the basis of claims it was entitled to continue to service the loan under the amortisation schedule and the fund cannot allege default or appoint a receiver when there is full compliance with that schedule.
In good health
The balance of convenience favoured granting the orders and the partnership would be in a position to pay damages to the fund should it lose the case, she also held.
It was not disputed the loan expires in 2020, is “in good health” and the property is valued at €13.55 million in 2014, with some €6.7 million outstanding on the loan, she said. The partnership is solvent and the loan is secured on a property valued at twice the outstanding sum, she noted.
There was no need to continue orders which provided for all rental income from the property to be held in an escrow account pending the full hearing, she also held.
The partnership comprises Gay Byrne, senior counsel Anthony Kidney, two solicitors – Eric Brunker, now retired, and Stephen Hamilton – and Dermot Murphy of Clonskeagh Motors.
It brought proceedings against Launceston and Stephen Tennant of Grant Thornton, as receiver over the property, after the fund informed the partnership failure to remit all rental income to it within 28 days would be considered an event of default.
‘High-quality’
In September 2016, the fund issued a demand for full repayment of the €6.7 million outstanding on the loan and appointed the receiver. The following month, the partnership got interim orders restraining the receiver dealing with the property.
After efforts to settle the dispute in mediation failed, the partnership sought last week to have the interim orders continued pending a full hearing.
Seeking those orders, Mr Fanning said there was no default on the loan and the fund was not at risk of not getting its money as the annual rental income is some €920,000 and the “high-quality” property was valued at €13.5 million in 2014.
Opposing the application, Declan McGrath SC, for the fund, argued the case appeared to be about the investors not wishing to be forced to sell this investment property three years earlier than they wished. A prior course of dealings with Anglo did not mean the fund is not entitled to rely on the loan security documents, he argued.
