Paul Sreenan, for receiver Martin Ferris, said there was an issue about the truthfulness of evidence related to whether businessman Hugh O’Regan, one of the owners of the hotel, had agreed to “rent holidays” or rent credits for the hotel. The court would have to decide the credibility of these claims, he said.
In 2009, after the hotel was mortgaged to Anglo via loans of some €41.5m, Mr O’Regan seemed to agree to give the hotel “a rent holiday” until its turnover exceeded €10m, counsel said.
Mr Sreenan said it was “not entirely clear” who the rent “holiday” agreements were with but Mr O’Regan had certainly agreed with himself in 2008 to give a rent credit for the €2m costs of integrating the old Morrison hotel with an extension.
A core issue in the case was that the mortgage had assigned the landlord’s interest in the hotel toAnglo, counsel said. It was the receiver’s case the assignor of that interest, therefore, had no power to do rent deals and such deals could only be done by the assignee, Anglo.
He was opening the proceedings by Mr Ferris, the receiver appointed by Anglo to Mr O’Regan’s Thomas Read Holdings, against The Morrison Hotel Ltd (MHL).
Mr Ferris was appointed by Anglo in July 2009 as receiver of the landlord’s interest in the hotel, operated by MHL, whose directors are Mr O’Regan, Martin Conroy and Dolores Barry. The shareholder of MHL is Thomas Read Holdings, which is in liquidation.
The hotel is owned by Mr O’Regan, Patrick Kelly and Patrick Dunning. MHL, in October 2006, entered into two leases with the landlord relating to the hotel and what was known as the Morrison Hotel Extension. Under those leases, MHL was to pay €1.4m rent per annum quarterly to Mr O’Regan for the Morrison Hotel.
Mr Ferris said his solicitors wrote to MHL on July 30 last advising all future rent should be paid to him as receiver. He was informed by MHL’s solicitors on August 12 last they were instructed rent has been discharged “to date”.
A draft report in April 2009 of MHL for Anglo recommended rent payable would have to be renegotiated with a view to a substantial rent reduction and also stated a rent free period was required for the remainder of the year and until there was a “substantial pick up” in trading.
This was a recommendation and could not be implemented unilaterally by MHL and Mr O’Regan without Anglo’s consent, which was not provided, Mr Ferris claims.