A SYNDICATE of banks that provided funds to companies of developer Seán Dunne towards acquiring the Jurys and Berkeley Court hotels in Ballsbridge for €400 million has settled court proceedings brought to get possession of those properties.
The case was initiated after Mr Dunne – having been informed on December 23rd that his company must vacate the hotels on January 1st as the syndicate was not renewing short-term letting arrangements – refused to yield possession until several outstanding issues were resolved, including a rent rebate.
The syndicate argued that Mr Dunne had no defence to the claim for possession and that he was indebted to it for more than €259 million under his personal guarantees of liabilities of DCD Builders, the parent company in the Dunne group.
Payment of that sum was demanded from DCD on January 5th and the syndicate would be entitled to call on Mr Dunne’s guarantees, it was also stated.
Mr Justice Peter Kelly was told of the settlement when the case came before the Commercial Court yesterday.
Lyndon MacCann SC, for the banks, said MJBCH Ltd (a company of which Mr Dunne and Ross Connolly are directors) had agreed to give up possession while another company, Mavior (ultimately owned by Mr Dunne’s wife Gayle Killilea), had arranged for transfer of title to the hotels’ fixtures and fittings.
In those circumstances, the judge struck out the proceedings and, on agreement, made an order for costs to be paid by MJBCH with no order for costs against Mavior.
The syndicate of lenders – led by Ulster Bank – said in an affidavit that it has entered into short-term letting agreements with Tulane Business Management for lease of the hotels, expected to trade for some years while the banks decide the best strategy for recovery of as much of their money as possible.
Mr Dunne had planned to build a €1.5 billion high-rise mixed development, with a 37-storey tower as the centrepiece, but that plan was rejected in January 2009 by An Bord Pleanála. The hotels were reopened under the D4 brand.
The court proceedings were taken by Zrko Ltd and Qulpic Ltd – owned by a syndicate of Ulster Bank Ireland, ACCBank and Kaupthing Singer and Friedlander (in administration) – against MJBCH Ltd and Mavior.
Companies Office searches indicated Mavior, of which Mr Connolly and Ms Killilea are directors, was ultimately owned by two Isle of Man companies – Zabingo Ltd and Zintala Ltd – with Ms Killilea appearing to be the ultimate owner of those entities. Nama appointed a receiver over certain assets of Mavior in July 2011.
On foot of loans made in 2005 and 2006 to DCD Builders, the hotels on seven acres were acquired by October 2007 and lease agreements concerning them were later entered into with MJBCH.
In late 2009, Mr Dunne and the syndicate agreed arrangements whereby the plaintiff companies were incorporated by the syndicate to acquire the hotels. Short-term letting agreements were also entered into.
The syndicate alleged that, despite expiry of the short-term letting arrangements in December 2011, possession of the hotels was not yielded up. Issues arose including concerning sale of hotel fixtures and fittings owned by Mavior, insurance covering flooding at the Jurys site, and payment for reinstatement works carried out by Mavior.
The plaintiffs said they had not to date paid rent rebate monies to MJBCH because it had not paid a substantial amount of outstanding rates owed to Dublin City Council in circumstances where the company was in unlawful occupation of the hotels since January 1st.
It was also claimed a security allegedly granted by MJBCH to Mavior without the prior agreement of Ulster Bank breached agreements with the bank.
