Nama has appointed a receiver to a trust run by the Diocese of Kerry as the State agency bids to recover more than €40 million in bank debt from a local developer.
The agency has just appointed Gearoid Costelloe of Grant Thornton as statutory receiver to a Killarney property that is still legally owned by St Brendan’s Trust, which holds property on behalf of the Diocese of Kerry, but which was sold to local business Galvin Developments during the boom.
Nama has appointed the receiver on foot of a number of mortgages agreed between AIB and St Brendan’s Trust in August 2007 over land close to Rock Road in Killarney.
The property formerly belonged to the Mercy Sisters and now houses the Oakwood care facility developed jointly by Galvin and Mowlam Healthcare.
Legal owner
It is understood that St Brendan's trust remained the legal owner of the land, which it originally held for the nuns' benefit, as Galvin Developments did not register its interest in the property when the deal was done in 2007.
The mortgages are “third- party limited recourse”, meaning that the trust gave the security to guarantee the bank’s loan. However, it also means that the bank’s security is limited only to the property that is the subject of the mortgage and prevents it from pursuing any of the trust’s other assets.
The Diocese of Kerry confirmed yesterday that the “property involved relates to certain lands at Coolegrean, Killarney which was held by St Brendan’s Trust as Trustee for the Mercy Sisters”.
It added that it had referred the matter of the statutory receiver’s appointment to its solicitors for attention.
AIB loan
In 2007, Galvin Developments bought the 16.9-acre site in Killarney from the Mercy Sisters using money borrowed from AIB.
The company developed a residential care facility, Oakwood, in partnership with Mowlam Healthcare, on four acres of the site and planned to build 81 houses on the remainder.
The houses were never built, and a €43 million loan from AIB associated with the developments was the subject of a number of court cases involving the company and its directors, brothers Jerry, Colm and Denis Galvin.
