Moran’s on the Weir, the pub and seafood restaurant outside Clarinbridge, Co Galway, is the latest battleground for a fight between a bank and a proud business family facing catastrophe because of unmanageable, multimillion euro property debts.
The thatched cottage that fronts the premises dates back to the mid-1800s, but the business itself is three centuries old and must be nearly unique in being kept in the same family for such a timespan. Inside the cottage are snug rooms warmed, on the day it was visited by The Irish Times, by a large open fire. A substantial rear extension does a reasonable job of maintaining the old-hostelry atmosphere.
The cottage is built opposite a pier on the Dunkellin river, a short distance upstream from where the river flows in to Dunbulcaun Bay. The original business logic for the pub was to sell drink to the boatmen, seaweed sellers, local farmers and turf-cutters who came to the pier to trade. The replacement of sea transport by road transport in the 1950s dealt a blow to the pub’s business but in the 1960s the family decided there was money to be made from serving food.
The conditions in Dunbulcaun Bay are ideal for oysters. Nearby Clarinbridge calls itself the home of the oyster and hosts an annual oyster festival.
Moran’s specialises in seafood, and oysters in particular, and the walls of the premises are festooned with photographs of well-known personages who have visited over the years. Former taoisigh Charles Haughey, Albert Reynolds and Jack Lynch are pictured sitting alongside film stars Pierce Brosnan, Rod Taylor and Roger Moore; stars from the world of sport include golfer Christy O’Connor jnr, a local man, and Jack Charlton. In his picture adorning the walls, Woody Allen is wearing a cloth cap.
The business is now run by the seventh generation of the Moran family, according to a note that accompanies the menu, but the continuation of the family's involvement is just one of the issues raised as AIB pursues a €20 million debt.
There was no response to requests for an interview with a member of the Moran family, while the bank said it could not comment.
William Moran (58) took over the business from his father, Michael, and has been working in it all his life. In more recent decades, he and his wife Sheila invested in Irish residential property, using loans and mortgage debt from AIB.
They also invested in a property company in Poland, that in turn owns a Polish office block. When the property/bank collapse came in the late 2000s, the couple found themselves in deep financial trouble.
Public records indicate that the bank issued the loans to the couple without seeking security over the family business near Clarinbridge.
Restructuring
In 2010 AIB began negotiations with the family about restructuring their debt. The bank believed it reached an agreement that the couple would sell or refinance the Polish office block and sell the Galway pub, with the bank likely to get €1.25 million as a result of the latter property’s sale, according to evidence given to the courts.
However, in August 2011, the bank learned that ownership of the Polish property company, Grudnia Investments, had been transferred from the couple’s name to that of one of their sons, Dónal.
Furthermore, it learned that the Galway pub had been sold but the bank had not received any proceeds from the transaction. In March 2012, AIB appointed receiver Jim Luby to 24 properties arising from 24 separate mortgages. The couple, and one of their sons, Michael, challenged the appointment in the courts, but were unsuccessful.
From what is known of their replies to the bank to date, the couple say they have been engaged in lengthy negotiations with the lender and have paid more than €2.7 million arising from the sale of unencumbered assets. However, that leaves them a long way short of the €20 million the bank wants repaid.
In April and June 2011 court records show the couple’s agent, Margaret Connolly of the Cogent Taxation Group Ltd, Cork, told the bank the Morans were not in a position to repay all their debts or service them.
In May 2012 Mr Justice Peter Kelly, in the Commercial Court, granted a judgment order to AIB against the couple. The judgment was registered in the Land Registry in relation to 33 different property portfolios in counties Galway, Roscommon and Longford.
A year earlier, in April 2011 Moran’s on the Weir was sold by William and Sheila Moran to The Weir Trading Ltd, a company with an address at the premises and which was incorporated in September 2009. According to the company’s accounts, the sale of the property was “an arm’s length transaction at an independently agreed market value”.
The price paid is not revealed but the company’s tangible assets jumped to €1.46 million that year, having been just €51,859 at the year’s outset.
The latest filed return for the company is dated September 2015 and shows the directors as Sheila, William, Catherine (born 1985), Brian (born 1993) and Dónal (born 1989) Moran.
The company’s ordinary shares were owned by three Irish companies that were, in turn, owned by a company called Dewglade Company, while a New Zealand company called Ardberry, held one preference share.
Filings in New Zealand show that the Morans’ adviser, Margaret Connolly, is a director of Ardberry.
The latest return for Dewglade, the ultimate owner of The Weir Trading, shows that it is owned by Catherine, William, Dónal, Brian, William jnr and Sheila Moran, all with an address at the Weir. Brian and William Moran jnr got their shares in September 2015.
The documents filed with the Companies Registration Office (CRO) in relation to The Weir Trading include two mortgages. The first, dated August 2011, is in favour of William and Sheila Moran, while the second, dated January 2012, is in favour of the Bank of Ireland. Neither mortgage is satisfied, according to the filings, though a document in the Registry of Deeds may indicate that the mortgage relating to the couple has been settled.
The mortgage document in favour of the Morans is for €1 million and the property charged is given as a particular numbered Galway folio – a document in Land Registry outlining details of the property, its ownership and any charges or “burdens” on it – and the “intoxicating liquor licence attached thereto”. The document is signed by Michael Moran as a director of the company. The property folio identified in the document does not in fact exist, but the identifying number is just one digit out from the folio number given in the bank’s charge, so this may be a simple error.
Mortgage documents
The certificate of the bank’s mortgage does not disclose the amount involved. It says the property charged is Moran’s on the Weir. The document includes an agreement that the company will not create any mortgage that would rank before, or equal to, the one with the Bank of Ireland, and is signed by Sheila Moran.
The records in the Registry of Deeds do not tally with the mortgage documents in the CRO, and it is not clear why this is so. The Bank of Ireland mortgage is not registered on the folio cited in the mortgage document, though the AIB judgment mortgage was, in February 2013.
Parts of the property associated with the folio were transferred to two other folios in February 2012 and February 2013. The folio to which transfers were made in February 2012 is owned by The Weir Trading Ltd, with an address at St Patrick’s Hill, Cork, an address used by Cogent Taxation Group.
The “burdens” listed on this folio are all dated February 2012 and include the Bank of Ireland mortgage as well as rights and privileges in favour of William and Sheila Moran during their lives. The details of these rights and privileges are not listed in publicly available documents. The burdens also include two charges for the nursing home expenses of William and Sheila Moran, and again the specifics of these are not disclosed in publicly available documents. A charge for €1 million in favour of the couple, registered in February 2012, is stated as having been cancelled in September 2012.
The second folio to which transfers were made is also owned by The Weir Trading Ltd and the AIB mortgage judgment is registered on it.
What exactly all of this means and why it came about is not clear, but further details are expected to become known on Monday when the Morans’ case returns to court. At a hearing in mid-February, counsel for AIB complained that, despite a court order that they do so, the Morans were not providing the bank with details of their affairs.
The court was told the Morans had spent €900,000 on living expenses from proceeds of property sales but had not used any of the proceeds to reduce their €20 million debt.
Despite selling off unencumbered property assets for a total of €2.8 million, none of the money had been used to reduce the debt to AIB, it was claimed.
In an affidavit, Bernard Carroll, a manager in AIB’s financial solutions group, said the €2.8 million came from the sale of the pub (for €1.5 million), an apartment (for €943,000) and sale of loan rights (€370,000) in the Polish company, Grudnia.
‘Living expenses’
Some of the money was used to pay the Revenue Commissioners (€415,000) and the Morans’ professional advisers (€211,000), leaving around €2.26 million available, it was claimed.
The bank had learned that, between November 2011 and December 2014, some €900,000 was withdrawn from the couple’s Bank of Ireland account, representing an average monthly expenditure of €24,000.
Of this, about €250,000 was paid for “future educational expenses and living expenses” of three of the Moran children, including €60,000 to 18-year-old Brian Moran; 14-year-old William Moran jnr received two payments totalling €65,000 in January and February 2012, Carroll said.
There were also transactions relating to the Polish company and a Latvian company called Invest Agra SIA, he said.
Mr Justice John Hedigan said it was not sufficient for the family, in response to the bank’s questions, to just say money had been spent without vouching for how it had been spent. He adjourned the case to this Monday and said the bank’s questions should be “answered in detail”.
