A so-called "vulture fund" owned by Goldman Sachs is pursuing High Court action against several members and associates of the Kelleher family that owns the Blarney Woollen Mills group, including the group chief executive Freda Hayes.
It appears the action is being taken to enforce guarantees given by members of the Cork family for property loans made by Anglo Irish Bank.
Kenmare Property Finance, which bought a €200 million portfolio of old Anglo loans, this week sued Ms Hayes and her husband, Colin Hayes; Pat and Frank Kelleher; long-time Blarney director Robert Reardon; and Archie McLoughlin, who is named with Kathleen McLoughlin, once a director of companies linked to Blarney's Meadows & Byrne.
At the time of publication, Ms Hayes and another director of the Blarney group had not responded to emailed requests for comment.
Debts allegedly owed
Kenmare is suing the respondents, none of whom have yet filed a defence, for debts allegedly owed.
The Goldman fund previously, in 2015, installed a receiver on a Blarney group-linked property company, Zalaal.
Zalaal owned the site of the old 91-bedroomed Blarney Park Hotel in Cork, which members of the Kelleher family had hoped to redevelop into an office complex prior to the last property crash.
The latest accounts for Zalaal, for 2014, show it owed Kenmare more than €1.7 million at that time and had a hole in its balance sheet of this amount.
The accounts said the loan was partially secured by “several guarantees of the company shareholders limited to their shares in the company”.
Negotiations with the lender were ongoing at that time.
Receiver’s report
The latest receiver’s report for Zalaal, filed last October, shows the site was sold for €396,000 and a dividend of €345,000 had been paid to Kenmare.
Zalaal had no other assets, the receiver’s documents state, implying there was a major shortfall on the secured Kenmare loan.
The action being pursued by the Goldman fund against the investors is for a summary judgment, which, if granted, would give the lender the possibility of pursuing any of their personal assets.
Considered a hawkish tactic, so-called vulture funds often instigate summary judgment proceedings during debt negotiations or to safeguard their interests in the event a statute of limitations kicks in.
Shortfalls
Kenmare has 13 such summary actions in the High Court against business people, as it continues to chase shortfalls on the loans it bought that were secured by personal guarantees.
Ennis Property Finance, another Goldman fund, has filed seven such proceedings in two months.
The Blarney group, which includes the Woollen Mills and retail operations and Meadows & Byrne, employs more than 500 staff and is a favourite of US tourists seeking Irish fashions and crafts.
The Blarney group was formed after a split within members of the Kelleher family over the Kilkenny group.
That company was recently the subject of court proceedings following another family fall-out.
