THE HIGH Court has given AIB a charge over Barry’s Cork, the company owned by the family of former foreign minister Peter Barry, as security for €8 million owed to it by one of the firm’s directors, Donagh Barry.
The High Court yesterday gave a charge over 9 per cent of the company to the bank, which is seeking to execute a judgment against Donagh Barry for €8 million that relates to a failed property venture undertaken by him and his brother-in-law, Michael McCarthy.
The interim order means that the bank has a charge over the 90,000 shares in Barry’s (Cork), which Mr Barry owns, as security for the money he owes to AIB.
The order does not mean that the bank owns the shares outright. The case is due back in court in two weeks, when Mr Barry will be given the chance to argue against the charge being made absolute.
Barry’s (Cork) is the holding company for the family-owned Barry’s Tea business, which, according to its website, distributes 40 per cent of the €78 million worth of tea sold in retailers around the country.
AIB was originally granted a judgement for €8 million against Mr Barry and Mr McCarthy in May. Their company, Central Plaza Properties Ltd, borrowed €18 million from the bank in August 2007 to develop a site in the Mahon area of Cork city.
Both men gave personal guarantees up to a maximum of €8 million each as security for the loans. The development did not go ahead as the property market crashed the following year.
The court heard yesterday that the company defaulted on interest payments in 2009. AIB subsequently demanded payment and then began proceedings against the two guarantors.
The case is the first high-profile example of a bank pursuing assets in the real economy as a result of the property crash.
One source yesterday predicted that many similar cases could follow as banks try to recover unpaid loans given for property development at the height of the boom.
Barry’s is a long-standing family business that dates back to 1901. Its headquarters is on Kinsale Road in Cork city and it employs more than 70 people.
According to company returns, Donagh Barry’s brother, Tony, holds 55 per cent of the firm, while five other family members own 9 per cent each.
Donagh Barry’s sister, Deirdre Clune, who is also a shareholder in the company, is a Fine Gael TD.
Mr Barry and Mr McCarthy previously worked together on a number of successful property deals. Both are involved in other businesses.
Along with his interests in the family company and property, Mr Barry is a director of Dublin-based catering supplies firm Hugh Jordan. He lives in Rathmines in the capital.
Mr McCarthy lives in Ballinlough in Cork. He is a director of IT services firm Compuland, and Maclock, a locks and security equipment business.
