Celebrity chef Conrad Gallagher was insolvent before he moved his restaurant to the Fitzwilliam Hotel, a jury has been told at the start of his trial for allegedly stealing three paintings.
Mr Michael Holland, managing director of Ampleforth Ltd, owners of the hotel, told Dublin Circuit Criminal Court that Mr Gallagher was £92,000 in debt before he came into the Fitzwilliam Hotel and gave two different explanations as to why the paintings went missing.
Mr Holland said the company loaned Mr Gallagher £50,000 to ease his dire cash-flow problems, waived rent for a period and paid £40,000 for consultants to set up a financial control system for him.
The company had also bought 19 paintings from him for £20,000 which it claims included the three he allegedly stole and sold later after giving two different explanations for their disappearance.
Mr Holland said Mr Gallagher first claimed the paintings had been taken down and sent to a Dún Laoghaire gallery so that security patches could be put on them but shortly after that he told him that thugs forced him to hand over the three paintings because of money he owed.
Mr Gallagher (32), formerly of Killiney Hill Road, Killiney, and with an address at Pembroke Road, Ballsbridge, denies stealing three abstract Felim Egan paintings from the Fitzwilliam Hotel on St Stephen's Green on dates unknown between November 2nd and November 22nd, 2000.
He has also pleaded not guilty to obtaining money by false pretences on November 21st, 2000 at The Lodge, Killiney Hill Road with intent to defraud through getting £9,000 from Mr Bryan Greene by falsely pretending that the three paintings were his property to sell.
Mr Holland told prosecuting counsel Ms Melanie Greally BL that Ampleforth licensed Mr Gallagher to run the entire food department of the Fitzwilliam Hotel. He operated Christopher's Brasserie from June 1998 and moved his Peacock Alley restaurant to the hotel in October 1998.
The formal agreement with Mr Gallagher was signed in December 1998 and all the fittings in the hotel except for tables and chairs in Christopher's Brasserie were owned by Ampleforth.
Shortly after, Mr Gallagher made them aware of his severe cash flow problems and when Ampleforth asked him for financial figures he said he had none. His accountants produced figures in March 1999 which showed he was insolvent and had been for some time.
Mr Holland said the accused asked the company to buy some paintings from him and produced a schedule numbered 1-16 but it transpired there were actually 19 paintings on the list.
Mr Holland said he became aware in November 1999 that three paintings from the Peacock Alley restaurant were missing. Mr Gallagher told him at a meeting they were taken down to have security patches fitted to them in a Dún Laoghaire gallery.
He told the accused he had no right to move them and he promised to have them back within days but when they had not come back by November 27th he again spoke to Mr Gallagher who claimed thugs had forced him to hand them over in lieu of money he owed someone.
Mr Holland said Mr Gallagher then offered to replace them with three other Phelim Egan paintings but he told him the company wanted the originals back.
He told him the matter was out of his hands and made a verbal complaint to the gardaí.
Mr Richard N. Keane SC, defending, suggested to Mr Holland, in cross-examination, that he had pressurised Mr Gallagher into selling the three paintings for £9,000 to raise money for an attachment order the Revenue Commissioners had filed against a company Ampleforth co-owned with him and which was set up to run his restaurants.
"There was never any question of me saying to Conrad to do whatever he had to do to raise the money," Mr Holland replied. On the contrary, he said, Ampleforth had tried to assist Mr Gallagher in many different ways to help solve his dire financial difficulties.
The hearing continues.