The buyer of a high-profile hotel whose €1.5 million sale is the subject of a legal challenge only paid a deposit weeks after a rival bidder maintains it had already done a deal to purchase the property, the High Court heard on Tuesday.
Treacy Hotels Group has gone to court to enforce a contract to buy the Ard Rí, which overlooks Waterford city, for €1.6 million, which the business says it agreed with US fund Cerberus in November 2016, when it paid a €160,000 deposit and proved it had the cash to pay for the property.
Martin Hayden SC noted in the High Court on Tuesday that businessman Seamus Walsh, who subsequently paid €1.5 million for the hotel, did “not provide any deposit” until December 5th, two weeks after the Treacy Group paid its €160,000 on November 21st.
Mr Walsh did not provide any proof of funds before the following January, despite the fact that Cerberus’s adviser Capita maintained that this was needed to consider any offers for the property, Mr Hayden, Treacy Group’s lawyer, added.
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Treacy family member Maria Keena is asking the High Court to order Cerberus subsidiary Promontoria Aran Ltd and receiver Luke Charleton of EY – previously Ernst & Young – to complete the sale of the Ard Rí Hotel to the group.
Ms Keena maintains a receipt for the deposit signed on November 21st by herself, Bob Lanigan, a long-standing associate of the hotel group, and Chris Allen of EY, at the firm’s offices, is evidence of its agreement to buy the hotel for €1.6 million.
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The group says Mr Lanigan agreed those terms in a series of phone calls with Terry Byrne of Cerberus European Servicing Advisors (Ireland) Ltd, and made arrangements to pay the deposit with Andrew Geraghty of Capita, now called BCM Global, and Mr Allen.
Earlier on Wednesday, defence lawyers challenged Mr Lanigan, a witness for the Treacys, on evidence he had previously given on the sequence of phone calls between himself, Mr Byrne of Cerberus, the hotel group’s founder Jim Treacy and other parties.
The defence argues that the timing of several calls on November 18th and 21st, 2016, as set out by Mr Lanigan, is incorrect.
However, Mr Lanigan insisted he gave evidence in accordance with his own records and what he believed to be true.
Michael McGrath SC pointed out that Mr Lanigan had said he received “numerous” calls from Capita on November 21st in relation to the payment of the deposit, when records indicate the firm had only called him once.
“In fact, it was you doing the chasing,” the lawyer noted.
Mr Lanigan responded that he was keeping Capita up to date on progress and that he dealt with more than one individual in the firm.
The Treacys got a bank draft for €160,000 and drove from Waterford to EY’s offices in Dublin to hand it over. The accountants’ firm kept its offices open until 8:30pm on November to facilitate the payment.
Giving evidence later, Mr Geraghty acknowledged that he may not have told Mr Lanigan of the requirement to provide proof of funds until a conversation on November 22nd, which would have been consistent with Mr Lanigan’s evidence.
He also agreed that a colleague had told him in an email that Cerberus European Services needed to see proof of funds before it could formally accept an offer.
After Treacy Group’s accountant provided the proof on November 28th, Mr Geraghty confirmed to Mr Byrne in an email that the hotel group had the cash to buy the Ard Rí and to refurbish the property.
Mr Byrne subsequently responded that his firm was proceeding with a sale to the “tried and trusted” Mr Walsh.
Mr Geraghty told the court that he saw nothing unusual in this decision. “It was one of the offers on the table, they decided to take that one,” he said.
