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High Court round up

Jun 23, 2010
Claire Hartnett takes a look at this week's High Court proceedings, including the disqualification of the director of FAI Finance Corporation and the Flash Developments liquidation.

 

FAI Finance Corporation Ltd
The director of finance company FAI Finance Corporation Ltd, which went into liquidation in 2008 owing some £36 million, has been disqualified for four years.

Speaking in the High Court on Monday, Ms Justice Mary Finlay Geoghegan said that Mr Stephen Harvey had recognised and acknowledged his failings as managing director and disqualified the Australian-born businessman for 4 years.

Another former director of the firm, Terence Youngman, had already been disqualified for five years.

In what was described in the High Court last week as an "astonishing insolvency", FAI Finance Corporation Ltd was wound up in December 2007 with losses of some £36 million and negative assets of £32 million. William O'Riordan of PwC and Simon Granger of FTI Consulting were appointed joint liquidators to the firm with offices at Swords Business Campus, in Co. Dublin.

FAI Finance Corporation had been engaged in providing loans, such as right to buy loans, a scheme operated by the UK government which allowed local authority tenants in the UK to buy their rented homes at a discount. The Court also heard last week that the company had allegedly been the victim of a very large fraud.

Lance Group
A large number of inter-company loans will have to be investigated by the liquidator appointed to a group of related companies known as the Lance Group, the Examiner's Court heard on Monday.

Carl Dillion was appointed liquidator to Askon Homes Ltd, Askon Investments Ltd, Askon Properties Ltd, Lance Homes Ltd, Lance Investments Ltd, Lance Properties Ltd, Lordford Land Ltd, and Vilbrook Construction Ltd in May of this year. The companies, which were incorporated between 1980 and 1998, had been involved in construction and property development.

Counsel for the liquidator told the High Court that each company had been wound up by Revenue and that a fairly complex group structure existed between the firms. A large number of inter-company loans had also been uncovered, which would have to be investigated.

Flash Developments
The High Court also heard on Monday that the liquidator of Flash Developments Ltd, Kieran Wallace, is pursuing an investigation into representations made on behalf of the company which appear to suggest that the company may have taken deposits for villas and apartments when it didn't have the authority to do so.

The firm, controlled by businessman Ciaran Maguire, was placed into liquidation in May following a court petition by international recruitment firm Hays.

Flash Developments had received deposits from 200 Irish and British investors for properties in a proposed €100 million resort on Cape Verde. But speaking to the Sunday Business Post last month, Magure insisted that all of the deposits were safe, despite the wind-up of the firm, because all contracts, development lands and credit lines had been transferred to another company – the Ciaran Maguire Group.

Commercial Court
Meanwhile, the Commercial Court heard on Monday that Anglo Irish Bank is seeking judgement orders for €26 million against insolvent businessman Brendan Murtagh. The nationalised lender is pursuing Murtagh for repayment of €23.4m and £2.1m in personal loans made to the businessman between 1999 and 2009. The loans were for commercial dealings in shares and properties. Anglo said it had given Murtagh time to restructure his interests in the hope that he might be able to deal fully with the debt. No repayments had been made since last March, however, at which time the bank became aware of other proceedings taken by private investors against Murtagh.

The former Kingspan director was once worth €271 million but now has liabilities of €353 million and the Anglo court case is the latest in a series of actions against the businessman. In April, a receiver was appointed over his €830,000 pension pot while Anglo has security over Murtagh's shares in Kingspan, estimated to be worth €26.4 million. Judgements totalling €60 million have also been registered against him, most of which relate to his involvement in the property firm Howard Holdings.

In separate proceedings in the Commercial Court, four Cork businessmen consented to summary judgement for €38 million over unpaid loans. The orders, sought by Anglo Irish Bank, relate to four loans to an existing loan facility for a site in Co. Cork.

The defendants had planned to develop the site at Grand Parade Plaza, Cork for offices, retail units and a city library. Over €100 million in judgements have now been lodged against the four businessmen at the Commercial Court in less than a week.

 



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