ONE51 INVESTMENT group chief executive Philip Lynch has told the Commercial Court he could “never, ever” have exposed himself, his wife or children to any liability for a €25 million loan advanced by AIB to buy development lands in Waterford.
It was intended Mr Lynch’s four children would, as a result of the Waterford deal and other gifts to them, get some €1.66 million each, the court heard yesterday.
The children were to get 20 per cent of the anticipated profit from the deal, expected to be €4.39 million before tax, while their parents were to get 80 per cent, or €21.9 million.
Mr Lynch said it “never crossed his mind” he would have to raise money for the transaction related to the lands at Kilbarry, Waterford, and regarded it as having “no risk” attached, with the AIB loan secured on the land.
He said developer Gerry Conlan had offered in 2006 to cut him in on the deal. Mr Conlan was “very generous” and had said it was “payback” as a result of assistance provided by Mr Lynch to him, he said.
Mr Conlan, Forenaughts, Naas, Co Kildare, understood that any recourse by AIB to Mr Lynch and his family was “a no-go area for me”, he added.
While they were both in Spain in January 2007, before the final loan facility letter of February 8th, 2007, Mr Conlan left him “in no doubt” that joint and several recourse would not be an issue.
At that time, Mr Conlan was a “most valued” client of AIB said to have had a net worth of €200-€400 million and AIB had got him from Anglo Irish Bank, Mr Lynch added.
Mr Lynch said he himself had a net worth of between €45-€50 million in 2007. He told Michael McDowell SC he was not aware in 2007 that AIB was saying it would give no more credit to Mr Conlan and had Mr Lynch on its “radar”. He did not believe Mr Conlan needed him at all but was instead “doing me a favour”.
Mr Lynch began his evidence yesterday in the continuing action by himself, his wife Eileen and their children – Judith, Philippa, Therese and Paul – seeking declarations they are not personally indebted to AIB for €25.3 million arising from a loan facility of February 2007 related to the Waterford lands. The case, before Mr Justice Michael Peart, arises from an alleged co-ownership and profit agreement between Mr Conlan and the Lynches in relation to the 2006 purchase of 86 acres at Kilbarry, Waterford, with a view to development.
The lands are now said to have a value of about €4 million.
The action is against AIB and two firms of solicitors – LK Shields and Matheson Ormsby Prentice.
The family claim LK Shields represented their interests in relation to the AIB loan and are claiming entitlement to an indemnity against it and/or Matheson Ormsby Prentice, which represented Mr Conlan’s interest, in relation to any claim by AIB against them.
The defendants have denied the claims and AIB is claiming €25.3 million judgment orders against the Lynches. Separate proceedings by AIB against Mr Conlan will be heard later.
Mr Lynch said yesterday he had met Mr Conlan during a charity golf outing in 2005. Mr Conlan had asked him to study proposals related to plans for private health provision and hospital co-location projects.
Some time later, Mr Lynch said, Mr Conlan asked him to have a look at the Kilbarry proposal. Mr Lynch said Mr Conlan had told him he would like to “cut me in”.
The case continues.
