THE LONG-RUNNING action by businessman Philip Lynch and his family aimed at preventing Allied Irish Banks from pursuing them for repayment of a €25 million development loan is expected to conclude at the Commercial Court today.
In his closing reply for the family yesterday, Brian O’Moore SC said the evidence was that they always understood the February 2007 loan was made on the basis that AIB would have no recourse to them individually for the €25 million and they would not have signed up to it otherwise.
The family had been wrongly painted as “Celtic Tiger cubs” involved in an “orgy” of casual, promiscuous and high-risk borrowing when the opposite was the case and they had a “conservative” attitude towards borrowing, he said.
Various loans taken out by the Lynch children to buy shares in their father’s company, One51, were not reckless or part of the “madness of the Celtic Tiger days”, he said. The only orgy was akin to “an orgy in a vicarage”.
Mr Lynch and his wife Eileen were also careful borrowers and while one loan facility for €129 million was available to them, in relation to the Millennium Park development project in Co Kildare, it was not taken up, Mr O’Moore said.
Another borrowing of €1 million for investment in the Sawcross development in the US was “trivial” given Mr Lynch’s net worth at the time and his €1 million earnings annually, he added.
Mr O’Moore is expected to conclude his arguments today after which Mr Justice Michael Peart is expected to reserve judgment.
The case opened on December 3rd last and was listed to last 10 days. Today will be the 27th day of the hearing with the legal costs expected to amount to several million euro. Mr Lynch, his wife and four children – Judith, Philippa, Therese and Paul – have brought the action against AIB and two law firms, LK Shields and Matheson Ormsby Prentice, in an effort to avoid AIB pursuing them over the €25 million loan.
The loan was issued to the family and developer Gerry Conlan to buy lands at Kilbarry, Waterford, for development.
The family claim they always understood AIB’s recourse would be limited to the lands. They allege the defendants were negligent in how they dealt with the loan and claim they are entitled to be indemnified against any claim by AIB against them for repayment.
The defendants have denied the claims. AIB has contended the loan was full-recourse to all borrowers and has counterclaimed for €25 million judgment orders against the Lynchs and, in separate proceedings, against Mr Conlan.
