A developer being pursued by Anglo Irish Bank for €84 million over unpaid loans of almost twice that sum has claimed he had “easy access” to senior figures in the bank, including Sean Fitzpatrick and David Drumm, and was actively encouraged by Anglo to undertake massive property developments with the assurance hundreds of millions would be made available.
During 2006 and 2007, Anglo was “extremely anxious” to lend money to his Fordham property group, Michael Daly said.
“Rather than I applying to the bank to borrow money, the bank met me on regular occasions to plan the future projects of the group.”
He was regarded as “a favoured developer” in the mid-west region and could just pick up the phone to Anglo in Dublin and would be told to buy, Mr Daly said. His companies spent more than €300 million on development projects here, plus more than €100 million in projects in Germany.
In 2006 and 2007, Anglo was anxious the group make additional investments in Germany and David Drumm made it clear funds of up to €500 million were available, he said. Anglo also targeted his group for annual additional borrowings of up to €150 million for various projects.
Representing himself, Mr Daly, “Dalmin”, North Circular Road, Limerick, said he had relied on oral assurances from Anglo executives that personal guarantees provided by him over loans were secondary to the security taken by the bank and would never be relied upon. However, the Bank failed to take proper security and its handling of securities was “a shambles”, he said.
In an affidavit, Mr Daly said one loan of €91.2 million was provided on the basis of his own guarantee, capped at €9.5 million, plus a guarantee of his partners, also capped at €9.5 million. He had raised the issues of the guarantees with the bank’s senior executives a number of times and each time was assured they were regarded as “a formality” and Anglo would never be relying upon them.
Anglo, through a receiver appointed by it, now has control of the relevant assets and, in those circumstances, it was absolutely premature to be taking action against him, he said.
Maurice Collins SC, for Anglo, said the bank was clearly entitled to summary judgment for €84.4 million as Mr Daly, an accountant and experienced businessman, had accepted those monies were loaned and that he had signed the guarantees.
The claims by Mr Daly about his access to senior Anglo executives were not relevant to this application, counsel added, and he described as “incredible” claims by Mr Daly relating to Anglo’s approach to the guarantees.
Mr Daly had incorrectly asserted Anglo was only suing only him and not others over the loans, counsel added. Anglo had taken proceedings against a number of solicitors allegedly involved in some of the deals who also allegedly provided guarantees.
Mr Justice Peter Charleton will on Tuesday continue hearing Anglo’s application for summary judgment orders for €84.4 million against Mr Daly arising from personal guarantees related to a number of loans to several companies engaged in developments in the Limerick region.
Mr Daly is opposing the summary application and says he has raised an arguable defence.
The case relates to loans of more than €165 million advanced by Anglo to three companies in the Fordham property group and two partnerships to buy lands and buildings in and around Limerick city and county for development and sale/lease, including office, retails and residential units and retirement homes. When they
were not repaid by December last, the bank appointed a receiver over most of the assets of the companies.
Anglo claims Mr Daly was a director at all material times of Fordmount Property Group Ltd, (FPGL) Fordmount Developments Ltd (FDL) and Fordmount Developments (Savoy) Ltd (FDSL), all with registered offices in Limerick.
It also claims he was a 50 per cent partner of the Fordmount Partnership and the St Munchin’s House Partnership, both of Bishops Quay, Limerick. The other members in those parterships were solicitors Dermot O’Donovan, Michael Sherry, Aidan Frawley and Thomas Dalton, all of whom held a 12.5 per cent membership.
Anglo claims more than €165 million is owed to it by the three companies and two partnerships. Under personal guarantees, the bank alleges Mr Daly has a liability for some €84.4 million.
Mr Daly claims any loans entered into by the partnerships were done so as partners and any guarantees were on the basis of five guarantors. He claims his partners were four partners in the law firm, Dermot G.
O’Donovan & Partners (DGO’D), which firm, he alleges, was at all times the legal adviser to the Fordham property group and his own personal legal adviser.
