BUSINESSMAN PHILIP Lynch has denied a suggestion he was “remarkably careless” in protecting himself and his family when they signed up to a €25 million loan with Allied Irish Banks to buy lands in Waterford for development.
The suggestion was put by Michael Cush SC to Mr Lynch yesterday, in proceedings where he and his family are suing AIB and two firms of solicitors – LK Shields and Matheson Ormsby Prentice – to prevent AIB pursuing them over the €25 million loan of February 8th, 2007.
The Waterford project also involved developer Gerry Conlan, who is also being pursued for €25 million by AIB. The bank claims the loan facility provides for full recourse to the Lynch family and Mr Conlan.
Philip Lynch, who is chief executive of One51, his wife Eileen and four children – Judith, Phillipa, Paul and Therese – claim the loan was advanced on a non-recourse basis and allege negligence by the two law firms in relation to advice concerning the deal. The defendants deny the claims.
Yesterday, Mr Cush, for Matheson Ormsby Prentice (MOP), which acted for Mr Conlan’s side in the transaction, told Mr Lynch he wanted to put certain questions to him about the Lynch family’s claim they wanted a non-recourse deal. Mr Lynch agreed his bottom line was he would not expose himself or his family to any risk other than the bank would take back the Waterford lands. He agreed he never told MOP that.
Mr Lynch agreed he never checked if Mr Conlan had secured a non-recourse loan facility in relation to the deal. He said he had made clear to Mr Conlan from early 2006 and to Robert Burns – Mr Lynch’s personal assistant – full recourse to the Lynch family was “a non-starter”.
AIB had said Mr Conlan never asked for a non-recourse loan, Mr Cush said. Mr Lynch agreed no one representing the Lynch family had asked AIB itself for a non-recourse loan and added Mr Conlan “didn’t deliver it”.
Mr Lynch agreed, while a family decision was involved, the project could not proceed without him. He also agreed the possibility of being bought out by Mr Conlan was not explored after January 31st, 2007.
When Mr Cush suggested neither Mr Lynch, his daughter Judith – who signed the loan facility on behalf of the family – nor Robert Burns had any clear understanding of a “non-recourse” loan, Mr Lynch said he understood it “fairly well” at the time.
When Mr Cush put to Mr Lynch this all indicated he was “remarkably careless” in protecting his own interest and that of his family, Mr Lynch disagreed.
Earlier, cross-examined by John Hennessy SC, for AIB, Mr Lynch said he was not sure if Mr Conlan used the words “non-recourse” when discussing the deal with Mr Lynch in 2006. He was assured by Mr Conlan he would get full non-recourse lending and did not think he needed to go back to Mr Conlan to ensure he had got that, he said.
When Mr Hennessy said a memo of Robert Burns’s dated February 3rd, 2007, was consistent with the loan being recourse, Mr Lynch said that was Mr Burns’s “view”. He said he decided to go ahead with the deal when LK Shields confirmed an AIB facility letter of February 7th, 2007, was to the Lynch family’s satisfaction. The case continues.
