ALLIED Irish Banks (AIB) has secured summary judgment orders totalling about €22.7 million in two Commercial Court cases against a number of businessmen over unpaid loans relating to development properties.
Businessman Charles Anthony Cromwell, Downstown, Duleek, Co Meath, yesterday consented to judgment for €13.3 million relating to a loan to assist in the purchase of a site in Donabate, Dublin, in 2007 for €15 million.
Mr Cromwell had planned to obtain planning permission for the site and then sell it on but did not obtain that permission, Therese Duhig, AIB lending manager of Hume House, Ballsbridge, said in an affidavit.
A two-year moratorium on the payment of the interest and capital sum expired in October last and discussions took place with the bank as to how he might discharge his indebtedness, she said. Proposals made were not acceptable and immediate repayment was demanded but no payment was made.
On the application of James Doherty, for AIB, Mr Justice Peter Kelly entered judgment against Mr Cromwell for €13.3 million.
In a second case, on the application of Dermot Cahill, for AIB, judgment was entered on consent against developers John Cotter, Castlepark, Kinsale, Cork, and John A Cotter, Bayswater, Currabinny Road, Carrigaline, Cork, for €9.4 million each in relation to a loan by AIB in 2005 for the purchase of properties at Compass Hill, Kinsale, and Well Road, Douglas, Cork.
Judgment for €3.47 million was entered against another defendant, Darren Cotter, Newmans Mall, Kinsale, while another defendant – Finbarr Tierney, Ardkilly, Sandycove, Kinsale – was given an adjournment for three weeks to allow him obtain a new solicitor.
In an affidavit, Marie McBride, an AIB official based at South Mall, Cork, said there were delays getting planning permission for the Compass Hill site but eventually permission was obtained for 12 detached houses in February last year.
There was then difficulty selling the sites, a difficulty worsened by the high cost of contributions being sought from the local authority, she said.
While permission was sought for nine townhouses on the Well Road site, it was granted for four but none of the sites has been sold.
The defendants had also obtained another loan for €3.2 million from AIB in 2006 for the purchase of a site at Farm Lane, Kinsale, for which they obtained permission for 27 houses. They were only able to obtain two signed contracts of sale however, Ms McBride said.
The bank “exercised forbearance” in demanding repayment during 2009 in circumstances where the defendants were “doing everything feasible” to generate sales, Ms McBride added.
Each site was in a prime location, and the defendants were experienced and competent builders and developers, but the bank was unhappy with their failure to progress sales on the sites, she said. Unfortunately, the spring of 2010 market passed without any marked improvement in the sales position and the bank then decided to demand immediate repayment.