Developer Johnny Ronan’s group of companies have claimed before the Commercial Court that certain actions by a US investment firm could have “catastrophic” consequences for three planned developments in Dublin with a gross value of more than €1 billion.
James Doherty SC said the actions by Digital Bridge Inc, formerly Colony Capital, including threatening to appoint a receiver over the Waterfront development in Dublin's north docklands, must be seen in the context of an "entirely obscure" transaction last June under which Colony agreed to sell its interest in that and other joint venture developments with the Ronan companies to a New York-based lender, Fortress Credit Opportunities LLC.
Fortress has “explicitly” stated to the Ronan side in phone calls that it is “calling the shots” and an application will be brought to join Fortress to these proceedings as a co-defendant, counsel said.
His side believed the threat to appoint a receiver was also directed at avoiding an agreement, reached orally last December between Mr Ronan and Tom Barrack, then executive chairman of Colony, concerning the disposal of Colony’s interest in two projects, the Spencer South and Fibonacci projects, to a consortium comprising Mr Ronan and South African investors.
Mr Doherty, for Ronan Group Real Estate Ltd (RGRE) and four related companies, applied on Tuesday for an urgent hearing of their application to continue an injunction restraining the appointment of a receiver over assets of the Waterfront development.
Critical stage
In an affidavit, Rory Williams, chief executive of Ronan Group Real Estate, said it wanted to restrain the defendant’s actions until December 31st, 2021, by which time it expected to put in place a pre-letting of a substantial part of the Waterfront development to a multinational tenant.
Negotiations in that regard are at a “critical stage”, he said.
By contrast, if the defendants disputed actions are allowed, their effect on the business of the Waterfront development and on the planned developments of Facebook’s European headquarters at Fibonacci Square; of the European headquarters of Salesforce and the Samuel Hotel at Spencer Place; and the business of RGRE will be “profound and, in hugely significant respects, irreversible”.
Lyndon MacCann SC, for Digital Bridge and various affiliates, said the matter was also urgent for his clients who had moved for the appointment of a receiver because they are owed just under €317million.
The claim of catastrophic consequences was “a puff of smoke”, he said.
Counsel also said there was a “concerning lack of candour” in Mr Williams’s affidavit about the content of the December disposal agreement referred to.
The documents exchanged between the sides “were, from the get-go, all subject to contract”, he said.
Having agreed on Tuesday to admit the matter to the Commercial Court, Mr Justice Denis McDonald listed the interlocutory injunction application for hearing on November 23rd.
The judge noted the various allegations by both sides and stressed the parties should bear in mind, when hearing the injunction application, the court will not be deciding the merit or otherwise of those claims.
Court’s task
The court’s task is to decide whether the criteria for a continuing injunction were met, he said. Those criteria include the Ronan side must raise a “substantial” issue to be tried and establish damages would not be an adequate remedy if the injunction is refused.
Digital Bridge and RGRE are joint venture partners in Waterfront, a commercial and residential scheme that would see more than 1,000 new homes and 66,718sq m of office space developed. The office scheme has planning permission but An Bord Pleanála refused last May to grant approval for the planned residential element, comprising two 40-plus storey towers.
Digital Bridge owns 70 per cent of the Waterfront development.
The legal action arises after the US group decided to wrap its share of their wider Irish joint ventures in a sale of $2.7 billion (€2.3 billion) of international real-estate assets to Fortress. Under the deal, due to be completed later this year, Fortress is to take ownership of Digital Bridge’s joint stakes with RGRE in Waterfront.
In its proceedings, the Ronan side contend the threat in an October 11th letter to appoint a receiver over assets of the Waterfront development, if the alleged debt of some €317million, including some €86 million interest, was not paid within some 24 hours, is unlawful and invalid and in “serious breach” of the Waterfront shareholder agreement and various other agreements.
