The Irish High Court has jurisdiction to deal with a challenge by a group of Irish investors in a Radisson Blu Hotel in southern France, against AIB bank's threat to take over their shares.
The court had heard that since proceedings started last month, the Toulouse Commercial Court had declared it had jurisdiction to deal with the proceedings as the centre of main interest was in France.
Today Ms Justice Mary Faherty rejected the submission of counsel for Blagnac Investments, the Irish investors' entity, that because insolvency proceedings had been initiated in France the Irish courts had no jurisdiction to determine matters.
Lydon MacCann SC, counsel for receiver Tom O’Brien and the bank, argued the matters currently before the French court had no impediment on the Irish court’s jurisdiction.
Last month the bank appointed Tom O’Brien of Mazars as receiver to Blagnac Investments, an Irish-registered investment vehicle that bought the hotel in Toulouse. Mr O’Brien was appointed following Blagnac’s alleged failure to satisfy the bank’s demand for repayment of €27 million which AIB claims is owed to it.
Arising out of the appointment, Blagnac and one of its directors and shareholders, Tom Kingston, are seeking a declaration from the Irish High Court that Mr O'Brien's appointment on July 17th is invalid and has no legal effect. The court heard the bank and Mr O'Brien were opposing Blagnac's application.
Mr Kingston, of Corran, Waterfall, Near Cork, told the High Court here that Blagnac Investments Ltd is an Irish registered holding company, whose shareholders comprise various individuals and self-administered pension funds.
The company holds all the share capital in Luxembourg-registered Blagnac Investments SARL, which in turn owns French-registered 2 Rue Dieudonne Costes (SAS).
The French company is the legal owner of the Radisson Blu Hotel in Toulouse. In 2006 AIB loaned the French company €31.7 million to refinance loans owed to KBC bank relating to the construction of the hotel. In September 2008 the parties entered into guarantees and indemnity agreements in respect of the loan, which were amended last year.
The hotel, which had been trading profitably but was suffering due to the debt burden, had earlier this year entered into a special mediation process supervised by the French courts.
The bank, which participated in the process, had rejected a proposal from a French official who suggested that to put the business on a long term sustainable footing, the shareholders inject additional funds into the hotel.
The ongoing French-Irish legal saga will be mentioned again in the Irish High Court on Tuesday.
