A SOLICITOR has told the Commercial Court an e-mail sent by him stating AIB “no longer require any legal recourse” against businessman Philip Lynch, developer Gerry Conlan “and the Lynch children” for a €25 million loan was based on information provided to him by another solicitor.
In writing the e-mail which was sent on February 8th, 2007, just hours before the final loan document was signed, solicitor Imdaad Sulaiman, then working with LK Shields, said he was merely reporting information which he had received the previous evening from Ronan McLoughlin, a partner in Matheson Ormsby Prentice (MOP) solicitors.
To his recollection, Mr McLoughlin had not mentioned to him that a special condition in an earlier draft from AIB of the loan document limiting recourse for the €25 million was being deleted because the bank had concerns about enforcement issues if it was left in, Mr Sulaiman said.
It is alleged the deletion of that condition had the effect of extending recourse to Mr Lynch, his wife Eileen and their four children for the €25 million sum.
Mr Sulaiman also said LK Shields’ role in the €25 million transaction for purchase of development lands in Waterford was limited to dealing with a co-ownership agreement and did not involve advising the Lynch family about the financing of the transaction.
Mr Sulaiman was giving evidence in the continuing action by the Lynch family against AIB, LK Shields and MOP aimed at preventing AIB pursuing them over the €25 million loan.
They claim the loan was a non-recourse facility secured on the Waterford lands. AIB denies that, insists the loan involves full recourse to the family and is counterclaiming for €25 million judgment against them. In separate proceedings, the bank is also claiming €25 million judgment against Mr Conlan.
The family has alleged negligence by both law firms and is claiming indemnities from them concerning the claims by AIB. Both legal firms deny the claims against them.
Yesterday, Michael Cush SC, for MOP, suggested to Jim Gollogley, a partner in LK Shields in 2007, that the “crucial failures in this case” were Mr Gollogley’s as “supervisor” of Mr Sulaiman and a partner in the office.
“I would reject that completely,” Mr Gollogley said.
Mr Sulaiman told John Gleeson SC, for LK Shields, that he sent an e-mail at 9.33am on February 8th, 2007, stating AIB no longer required recourse against the Lynch family and Mr Conlan. The e-mail was copied to Robert Burns, personal assistant to Mr Lynch.
When he sent that e-mail, he had not seen the final AIB loan facility letter, Mr Sulaiman said. That final letter was sent to him by Ronan McLoughlin just after noon that day and he had forwarded it to the Lynchs. He did not recall that Mr McLoughlin ever asked him if the Lynch family were okay with that final facility.
Mr Sulaiman also said the fee charged by LK Shields on the Waterford lands transaction was €7,000 plus VAT and outlay, totalling €8,561. The fee note referred to “Co-Ownership Arrange. Re Waterford lands”.
If the Lynch family considered LK Shields was retained to advise on financing of the deal, that was not consistent with the fee note issued to them, he said.
Beginning his cross-examination of Mr Sulaiman, Mr Cush suggested LK Shields dealt with matters beyond the co-ownership agreement, including matters related to the AIB loan facility.
Mr Sulaiman said that LK Shields’ retainer did not go beyond the co-ownership agreement.
He agreed that the firm did deal with some other matters, including matters relating to the facility letter, but said those were “administrative” tasks and were not to do with advising on the terms of the facility letter.
The case resumes on Tuesday before Mr Justice Michael Peart.
