THE FINAL terms of a €25 million loan issued by AIB to buy development lands in Waterford gave the bank full recourse to businessman Philip Lynch and his family for repayment of that sum, a solicitor told the Commercial Court yesterday.
Ronan McLoughlin, a partner in Matheson Ormsby Prentice solicitors (MOP), denied that a message left by him for another solicitor just hours before the loan facility was signed indicated it involved no recourse to the Lynch family.
He said he dealt in 2006 and 2007 with conveyancing aspects of the transaction in which 86 acres at Kilbarry, Waterford, were acquired by developer Gerry Conlan and the Lynchs.
The terms of the final loan facility letter issued by AIB on February 8th, 2007, and signed that same day by the Lynch family, gave the bank full recourse to Mr Lynch, his wife Eileen and their four children for the €25 million, Mr McLoughlin said.
While he dealt with conveyancing matters related to the transaction for all the purchasers, including the Lynch family, Mr McLoughlin said he regarded his primary client as Mr Conlan, a “very good” client of MOP for some years.
He always understood the Lynchs were being advised by LK Shields solicitors on all other aspects of the deal, he said.
Mr McLoughlin was giving evidence in the continuing action by the Lynch family aimed at preventing AIB pursuing them over the €25 million loan, which, they claim, they always understood was non-recourse.
Their proceedings are against AIB, MOP and LK Shields. AIB denies the loan was non-recourse and is counter-claiming for €25 million orders against the Lynchs. Both law firms deny negligence or that the family is entitled to an indemnity from them in relation to any judgment secured by AIB. Evidence on behalf of the Lynch family has concluded and AIB has not called evidence.
Cross-examined by Michael McDowell SC, for the Lynchs, Mr McLoughlin agreed he told LK Shields that the Waterford deal closing date was February 8th, 2007, when it was really February 12th. He agreed Mr Conlan’s side was aware of the real closing date.
He wanted the parties to concentrate their minds as all sides were dragging their feet, he said. Contracts had been exchanged since April/May 2006, a 28-day completion notice was about to run out and there was a danger of losing a very profitable deal and a €5 million deposit.
He said he was informed by Derek O’Shea of AIB at 6.40pm on February 7th, 2007, that the bank was removing a special condition in the loan facility letter that had confined its recourse to Philip Lynch and Mr Conlan.
He understood from Mr O’Shea that AIB was taking this step because it wanted to have recourse to all borrowers.
Mr O’Shea told him the special condition was being removed on advice from A&L Goodbody, solicitors for AIB, that its inclusion could cause enforcement difficulties for AIB, he said.
Mr McDowell said A&L Goodbody had said they provided no such advice.
The case continues.
