A DAUGHTER of businessman Philip Lynch has denied the reason her family regarded a €25 million deal for purchase of lands at Waterford as “risk free” was because they anticipated massive hikes in the value of the lands, not because they believed Allied Irish Banks would have no recourse to them individually for €25 million loans to buy the lands.
The 86 acres at Kilbarry are now said to be valued at about €4 million and the Lynch family has brought proceedings against AIB and two firms of solicitors aimed at preventing the bank pursuing them for €25.3 million judgment orders.
The proceedings arise from an alleged co-ownership and profit agreement between developer Gerard Conlan and the Lynchs in relation to the purchase of lands.
The Lynch family claim they entered the deal on the basis AIB’s recourse was confined to the lands at Waterford. They also claim that, between LK Shields Solicitors, as their solicitors, and Matheson Ormsby Prentice Solicitors, representing Mr Conlan, they were collectively led to believe they were signing up to a deal which would involve AIB having recourse only to the lands. The defendants deny the family’s claims against them.
The court has heard Judith Whelan, daughter of Philip Lynch – who is chief executive of the One51 investment group – signed the €25 million loan facility letter on February 8th, 2007 on behalf of herself and five members of her family.
Yesterday, Ms Whelan denied suggestions by Paul Sreenan SC, for LK Shields, that it had been beyond the Lynch’s “wildest dreams” that the value of the land would fall below €25 million, and that that was why the family regarded the deal as involving no risk. Ms Whelan said AIB had put as much faith in the value of the lands as her family had. Her understanding was the family would pay the interest on the loan and, if they did not, AIB would take back the lands and have no recourse to the family personally.
She understood her father would not expose his children to any risk relating to the Waterford deal.
Mr Sreenan referred to a memo of 2006 from Robert Burns, an adviser to her father, which referred to the “bankability” of the lands and said there was no reference in that memo or in a number of other documents that year to Philip Lynch saying he would not enter the deal on a non-recourse basis.
Ms Whelan said she had not seen that memo and was also not aware of a number of other documents circulated.
The plaintiffs – Philip and Eileen Lynch and their children Judith, Philippa, Therese and Paul – are seeking declarations they are not personally indebted to AIB for €25.3 million and are also claiming an indemnity from either or both law firms against any claim by AIB against them.
The case continues.
