BANK OF Scotland has brought proceedings in the US against a Co Waterford man over his alleged transfer of an apartment in New York to his wife for $10, the Commercial Court has heard.
The bank also yesterday applied to have its proceedings against Shane Houlihan, in which it is seeking summary judgment for €13.7 million over alleged unpaid property and other loans, fast-tracked in the Commercial Court.
It claims in those proceedings that a two-bedroomed apartment at West 10th Street, New York, was included in its security for various loan facilities provided to Mr Houlihan.
It says it learned in April last year that, about February 2010, Mr Houlihan had transferred his interest in the property to his wife, Zuzana Ratalova, a vice-president of Turner Broadcasting.
It claims the transfer was in breach of the bank’s security and constituted an event of default under the loan terms.
The bank also said it had brought proceedings in the US seeking declarations the transfer constituted a fraudulent conveyance under New York law.
Mr Houlihan had informed the bank at a meeting in Waterford last June that he had received legal advice to transfer the apartment into his wife’s name as he had understood one of his creditors was going to register judgment against him, the bank also said.
Despite requests from the bank, nothing was done to reverse the transfer.
Mr Justice Peter Kelly yesterday admitted the bank’s proceedings against Mr Houlihan, Goldcoast, Dungarvan, Co Waterford, to the Commercial Court. He adjourned the case to March to allow Mr Houlihan an opportunity to file affidavits outlining his defence to the bank’s claim.
Counsel for Mr Houlihan said he had prepared one affidavit but needed time to respond to the claims and also wanted an adjournment of the application to transfer the case. However, the judge said he would transfer the case.
The case arises from several facilities advanced by the bank to Mr Houlihan from 2007, including facilities for property developments in Clonmel, Co Tipperary, and Dungarvan, Co Waterford.
It claims security for the facilities included the apartment on West 10th Street. The bank claims it served formal demands for repayment of the facilities on October 27th last but that €13.77 million remains due.
In an affidavit, Mr Houlihan said he had left teaching in 2002 to pursue the business of commercial property development.
Among a series of claims, he alleges a true construction of agreements between himself and Bank of Scotland could never have been that interest and capital would be repayable but that the facility would be a medium-term interest-only facility, the eventual repayment of which would be dependent on the sale or long-term lease of the charged assets.
He said he had maintained all repayments to the bank, partially with the assistance of funds loaned by his wife, until a payment which fell due in January 2010.
He also claimed the bank’s alleged security of the New York apartment was either void or unenforceable and that the bank failed to conduct the required due diligence concerning the alleged security. He was advised the bank’s proceedings in the US were “baseless” and would not succeed, he added.
Mr Houlihan also said his wife had provided sums or discharged obligations of his from August 2009 for sums amounting to some $1.025 million. These sums were never intended as gifts but were always intended to be repaid and were sourced from the personal income and assets of his wife.
He and his wife entered into a formal agreement in December 2009 for repayment of the money, which provided he would transfer the New York apartment to her to satisfy the sums advanced by her.
That transfer was effected in February 2010, Mr Houlihan said.
