DEVELOPER BERNARD McNamara is resisting an application by private investors for summary judgment orders for €96 million against him over his guarantees of the borrowings of a company involved in the €412 million purchase of the Irish Glass Bottle site in Ringsend, Dublin.
Martin Hayden SC, counsel for Mr McNamara and his company Donatex Ltd, told Mr Justice Peter Kelly yesterday they would contend that the investors, procured by Davy stockbrokers and suing through their Jersey-registered agent Ringsend Property Ltd, are not entitled to the sum sought because there has been no default by his clients.
He said his clients would argue that repayment was not due because the investors had invested in the loan stock for seven years up to 2014.
Mr Hayden also argued that the investors were at all times aware of a planning risk relating to the development and had assumed that regulatory risk.
A High Court decision in another case meant the permission issued by the Dublin Docklands Development Authority was not valid and the reason for the development not proceeding was default by the docklands authority.
Mr Hayden said another line of defence and a “major issue” in the case was that Mr McNamara’s guarantee of January 29th, 2007, over the borrowings of Donatex, related only to the principal sum borrowed and not to interest.
The guarantee for €95.8 million was provided to Davy Property Holdings Ltd in respect of Donatex’s liabilities under the loan stock instrument and was later assigned to Ringsend Property Ltd.
Mr McNamara and Donatex may bring a motion to have Ringsend Property provide security for the costs of the legal action, it was stated.
John Gleeson SC, for Ringsend Property, said Mr McNamara had acknowledged his guarantee of the loan obligations of Donatex, which was now seeking to rely on pre-contract documents to resist the claim when the contract documents set out the real obligations of the borrower.
On the possibility of a motion for security for costs, Mr Gleeson said Mr McNamara had agreed to indemnify the investors in relation to moves to enforce the guarantee.
Mr Justice Kelly admitted the case to the Commercial Court and listed the summary judgment application for hearing on December 9th.
The court heard that in its information memorandum of November 2006 relating to the Irish Glass Bottle site, Davy referred to “risk factors” for investors to consider while noting Mr McNamara was providing a personal guarantee “on the principal amount due”.
The memo said: “Although we understand that Bernard McNamara is currently of significant net worth, there is no guarantee that will be the case should the guarantee ever be called upon.”
The transfer of the Ringsend Property Ltd action comes just a week after the court also transferred to its list proceedings by Mr McNamara, Ailesbury Road, Ballsbridge, Dublin, and Donatex Ltd, Pembroke Road, Ballsbridge, against the Dublin Docklands Development Authority.
