Lynch daughter denies ‘reconstruction’ of account over €25m loan

A DAUGHTER of Philip Lynch has denied AIB would not have sought a net-worth statement for Mr Lynch, which showed he had assets of more than €48 million in 2007, if a €25m loan to buy lands for development involved no recourse to the One51 investment group chief executive or his family.

Judith Whelan denied a suggestion by Paul Sreenan that a net-worth statement would not be required if a loan was to be non-recourse. She understood the statement was provided to AIB in 2007 as her father had to service the interest on the €25m loan for two years, she said.

Ms Whelan also denied suggestions her father did not tell her his involvement with developer Gerry Conlan in the deal was conditional on AIB having no recourse to the Lynch family.

She said her father raised the non-recourse issue in two phone conversations with her on February 7, 2007, the day before the loan deal was signed. One conversation lasted less than two minutes while the second lasted 34 seconds.

Mr Sreenan, counsel for LK Shields Solicitors, was continuing his cross-examination of Ms Whelan in the action by Philip and Eileen Lynch and their children — Judith, Philippa, Therese and Paul — seeking declarations they are not personally indebted to AIB for the €25.3m sum.

The case arises from an alleged co-ownership and profit agreement between Mr Conlan and the Lynches in relation to the purchase of 86 acres at Kilbarry, Waterford, with a view to development. The loan facility was advanced for that deal. The lands are now said to have a value of €4m.

The action is also against two firms of solicitors, LK Shields and Matheson Ormsby Prentice. The family claims LK Shields represented their interests in relation to the loan and they are entitled to an indemnity against it and/or Matheson Ormsby Prentice, which represented Mr Conlan’s interest, in relation to any claim by AIB against them. The defendants have denied the claims against them.

Yesterday, Ms Whelan denied an element of “reconstruction or construction” in her account to ensure consistency with her family’s claim they signed up to the loan on the basis it involved no personal recourse.

She denied that certain documents exchanged prior to the deal between the bank, solicitors and persons representing the interests of the family and Mr Conlan were inconsistent with the family’s no-recourse claim.

She was not aware of some of those documents and emails and was awaiting the terms of the final loan offer at the time, she said. The final offer was received about noon on February 8.

She agreed she had a phone conversation with Imdaad Suleiman of LK Shields Solicitors, two minutes after her first conversation with her father on February 7, 2007.

Mr Sreenan said Mr Suleiman’s note of that conversation did not record Ms Whelan making any reference to the loan having to be non-recourse and put to her the absence of any reference to a no-recourse requirement was because her father had not mentioned it. Ms Whelan disagreed, and said her father had made clear it was to be no-recourse or not at all and she was at the time waiting for the final loan terms.

The case continues before Mr Justice Michael Peart.