THE OWNERS of Kinnity Castle hotel in Co Offaly are not proceeding with a legal action against the bank-appointed receiver to the hotel now that the receiver has decided to sell it on the open market, the Commercial Court was told yesterday.
The owners had brought the action for orders to restrain Declan Taite acting as receiver, preventing a tender process for sale of the property concluding by earlier this month and requiring court approval for any offer below €10 million.
Rossa Fanning, for the owners, said yesterday that they were not continuing with the case in light of the decision of Mr Taite to place the property on the open market for sale by private treaty after failing to achieve an adequate price in the tender process.
Given that decision, it was difficult to see how his clients could bring a claim for damages.
Mr Justice Peter Kelly noted Mr Justice Peter Charleton had last month refused to grant the owners a number of injunctions including an order to restrain the sale of the premises. Mr Justice Charleton had ruled that they had failed to establish a fair issue to be tried in relation to several of their claims.
The judge said the property was now back on the market which rendered the action moot and Mr Fanning’s clients sensibly recognised this. He struck out the proceedings and awarded costs against the owners.
The owners, Cornelius Ryan, Pipers Cottage, Kinnity, and Kathleen Seret Ryan, with an address at the Algarve, Portugal, had brought the action against KBC Bank Ireland (formerly IIB Bank) and Mr Taite of Farrell Grant Sparks, Bride Street, Dublin, who was appointed last November as receiver and manager of Kinnity Castle, which employs some 70 people.
Mr Ryan had claimed the bank acted prematurely in calling in loans and was not entitled to appoint Mr Taite receiver. He also sought orders preventing the tender process for the sale of Kinnity Castle concluding on January 9th last as scheduled.
In an affidavit, Mr Ryan said he bought the hotel in 1994 and mortgaged the property to IIB bank in 2004 for €5,871,000. He owed the bank more than €6 million.
He said a deal to sell the property for €12.6 million in 2006 had fallen through but he had been trying to sell the property since then and had agreed to a tendering process to conclude on November 27th last.
Mr Ryan said the hotel was valued at €9 million and offers of €10 million by a German consortium as well as other bids of €8 million and $12 million were made. However, he had to withdraw from the tender process after damaging media reports concerning the value of the premises.
