Businessman claims €25m Waterford land deal was ‘a minor detail’ in his life

BUSINESSMAN Philip Lynch has told the Commercial Court a €25 million deal in 2006/07 to buy development lands in Waterford was “a minor detail” in his life at that time.

Mr Lynch also said he could not let developer Gerry Conlan — who was involved in the Waterford deal with Mr Lynch — be described as “a gambler”. Mr Conlan “is not a gambler and I would hate anyone to say that about him”.

This remark was a response to alleged advice by businessman Paschal Taggart, who was involved with both the Lynch and Conlan families, to Mr Lynch to the effect, if Mr Lynch “played with” Mr Conlan he would lose as Mr Conlan was “a gambler”.

Mr Lynch also denied a suggestion he never had any arrangement with Mr Conlan whereby Mr Lynch could have exited the Waterford deal at any time, and at a profit, prior to the Lynch family signing up to a €25m loan facility with Allied Irish Banks for that deal on February 8, 2007.

The court heard yesterday of a number of other loan facilities made available to Mr Lynch and members of his family by various financial institutions, including Anglo Irish Bank, AIB, Bank of Ireland Private Banking and Ulster Bank.

Those loans were advanced for several purposes, including property investments and to purchase shares in Third Force and One51, the court heard. One loan, from Anglo in 2007, was to provide a €6.5m “line of credit” for Mr Lynch while another, for €1m from Bank of Ireland Private Banking, was to enable Mrs Eileen Lynch buy shares in One51.

Mr Lynch said he was not directly involved in all those facilities but believed most were repaid and there was no default.

Paul Sreenan SC, for LK Shields Solicitors, referred to those facilities in concluding his cross-examination of Mr Lynch in the continuing action by the businessman, his wife Eileen and their four children — Judith, Paul, Phillipa and Therese — against AIB and two firms of solicitors aimed at preventing the bank pursuing them over the €25m loan advanced in February 2007 towards the purchase of 86 acres at Kilbarry, Waterford, for development purposes.

The family claim the loan was advanced on a non-recourse basis. They have also alleged negligence against two firms of solicitors — Lk Shields and Matheson Ormsby Prentice — in relation to alleged advice concerning the deal and are claiming indemnities. The defendants deny the claims.

Yesterday, Mr Sreenan put to Mr Lynch, during a meeting with solicitor Larry Shields in May 2009, Mr Lynch never made any reference to having phoned Conor Gunne, an associate of Mr Conlan’s, to make clear the AIB loan must be on a non-recourse basis. Mr Lynch said Mr Shields was well aware prior to May 2009 what they were being retained for.

Mr Sreenan put to Mr Lynch many of the other loan facilities referred to in which he or his family were involved were recourse facilities. Mr Lynch said there was no default on those loans and indicated security for these was via shares.

Earlier, Mr Lynch had indicated he might have misunderstood questions from counsel on Tuesday related to the meaning of “recourse”.

After referring in detail to matters in Mr Lynch’s witness statement, matters said in evidence and matters in correspondence, Mr Sreenan suggested these matters were not consistent with the claim the Lynch family always understood the AIB loan would be non-recourse.

Mr Lynch denied that and said he would have left the deal “like a bat out of hell” if he believed it involved AIB having recourse to him and his family.

He said he had not asked Mr Conlan about the terms being offered by AIB as Mr Conlan had said from the very beginning, when inviting Mr Lynch into the deal, there was nothing for Mr Lynch to worry about, Mr Conlan was a “prized client” of AIB and it would give him any money he wanted.

The Waterford deal was “a minor detail” in his life in early 2007 as there were a lot of other things going on then, he said. He had various professionals acting for him in relation to it and was awaiting the loan facility letter from AIB before he would sign up to anything.

He denied he never rang Mr Conlan sometime in the week beginning January 8th 2007 to tell Mr Conlan he would not agree to any condition requiring the loan to be a recourse loan.

The case continues.

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