A DIRECTOR of the operating company of the Morrison Hotel in Dublin did not agree when it was put to her yesterday that her company was attempting to “stymie” Anglo Irish Bank.

Dolores Barry of the Morrison Hotel Ltd (MHL) was giving evidence in the second day of a case taken by Martin Ferris, a receiver appointed by Anglo to the landlords’ interest in the hotel, who is seeking rent due.

Hugh O’Regan, developer Paddy Kelly and businessman Patrick Dunning are in a partnership that owns the hotel, while Mr O’Regan is a director and majority shareholder in MHL, which is a tenant of the partnership.

Ms Barry gave evidence via videolink from the Distillery Building on Church Street, to the hearing in the nearby Four Courts. The court heard she was suffering from nervous exhaustion and that psychiatrist Prof Ivor Browne was in attendance with her.

Ms Barry was asked by Paul Sreenan SC, for Mr Ferris, about e-mail correspondence between her and Mr O’Regan in August 2009. Drafts of a document with the title “memo of agreement of April 2009” were exchanged. Mr Ferris was appointed in July 2009.

She said the memorandum was an articulation of agreements that had already been arrived at between the co-ownership and the tenant concerning the set-off of rent due.

Mr Sreenan put it to her that these agreements were “between Mr O’Regan and himself” but Ms Barry said she understood Mr O’Regan and their fellow MHL director, Martin Conroy, had agreed a €2 million set-off in July 2008. She said she was a director of “eight or nine other companies” but agreed she had not sought a credit note for the €2 million.

Mr Sreenan said earlier drafts in August 2009 did not contain references that appeared in drafts of a few days later concerning agreements she said had been made some time earlier.

“Isn’t all of this being put in place to stymie the bank?” said Mr Sreenan. “I don’t agree with that,” said Ms Barry.

Mr Sreenan said it was clear in August 2009 that there were going to be proceedings against MHL for rent due and the memo was an attempt to “create a poison pill” to stymie the bank.

Asked if she wanted to comment, she said she did not.

Mr Conroy said he had reached an agreement with Mr O’Regan on the rent but was unclear as to dates. Asked if there had been a directors’ meeting of MHL to agree the matter, Mr Conroy said: “To all intents and purposes.” There was no record of this.

Earlier David Casey, a former official with Anglo Irish Bank, said it had let Mr O’Regan draw down a loan for another of his businesses, Clubko, in October 2008, even though it did not believe in the associated business case. The bank’s legal advice was that it was committed to the loan. At the time the payments on the €41.5 million Morrison Hotel loan were behind.

Clubko, which was behind the planned development of 8 St Stephen’s Green into a gentlemen’s club, is now in liquidation. The loan was for €22.5 million.

Mr O’Regan is expected to give evidence today.