Developers told to repay €22m loans

AIB has secured judgment orders totalling around €22.7 million in two Commercial Court cases against businessmen for unpaid loans relating to development properties.

Judgment was entered against businessman Charles Anthony Cromwell, Downstown, Duleek, Co Meath, for €13.3m related to the purchase of a site in Donabate, Dublin, for €15m in 2007. He planned to obtain planning permission for the site and then sell it on but failed to secure permission, AIB’s Therese Duhig said.

A two-year moratorium on the payment of the interest and capital sum expired in October and discussions took place with the bank as to how he might discharge his indebtedness, she said.

However, these were not acceptable and immediate repayment was demanded but not made.

Mr Justice Peter Kelly entered judgment against Mr Cromwell for €13.3m.

In the second case, judgment was entered against developers John Cotter, Castlepark, Kinsale, Cork, and John A Cotter, Baystwater, Currabinny Road, Carrigaline, Cork, for €9.4m in relation to a 2005 loan to purchase properties at Compass Hill, Kinsale, and Well Road, Douglas, Cork. A third man who also received this loan facility, Finbarr Tierney, Ardkilly, Sandycove, Kinsale, was given an adjournment for three weeks to allow him to obtain a new solicitor.

In an affidavit, Marie McBride, a Cork-based AIB official, said the three defendants encountered a series of delays in getting planning permission for the Compass Hill site but eventually secured it for 12 detached houses in February last year.

They have had difficulty in selling these sites, a difficulty worsened by the high cost of contributions being sought by the local authority, Ms McBride said.

The men also sought permission for nine townhouses on the Well Road site and eventually got permission for four but none of the sites have been sold, she said.

The three, along with businessman Darren Cotter of Newmans Mall, Kinsale, also obtained a loan for €3.2m 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 forebearance” in demanding repayment during 2009 in circumstances where the defendants were “doing everything feasible” to generate sales, Ms McBride said. Each site was in a prime location... but the bank was unhappy with their failure to progress sales on the sites. Unfortunately, the spring of 2010 passed without any marked improvement in the sales position and the bank decided to demand immediate repayment which was not made, Ms McBride added.

Mr Justice Kelly entered judgment against John and John A Cotter for €9.4m and against Darren Cotter for €3.47m.