The case opened last December and evidence ended last month after which legal submissions were heard over six days. When those submissions concluded yesterday, Mr Justice Michael Peart said he was reserving judgment on the 27-day hearing.
The judge did not indicate when judgment will be given but, given the length of the action and the issues involved, it is expected to take some time. The legal costs of the case are expected to amount to several million euro.
Mr Lynch, his wife and four children — Judith, Philippa, Therese and Paul — have sued AIB and two law firms — LK Shields and Matheson Ormsby Prentice — in an effort to avoid AIB pursuing them over the €25m loan of February 8, 2007.
The loan was issued to the family and developer Gerry Conlan to buy 86 acres at Kilbarry, Waterford, for development. The bank has brought separate proceedings against Mr Conlan over the loan which will be dealt with later.
The final loan document was signed on February 8, 2007, by Judith Whelan, daughter of Mr Lynch, on behalf of the family, the court previously heard.
An earlier draft facility contained a special condition providing for recourse to Philip Lynch and Mr Conlan but that special condition was removed from the final loan facility with the effect, AIB claimed, of giving it recourse to all borrowers for the €25m.
The Lynch family claimed they always understood the loan would involve AIB having no recourse to them individually for payment and its recourse would be limited to the lands. The court heard the value of the lands now has been estimated about €4m while in 2007 values of €80m were suggested.
The family alleged the defendants were negligent in relation to how they dealt with the loan and claimed they are entitled to be indemnified against any claim by AIB against them for repayment. The defendants denied those claims. AIB contended the loan was full-recourse to all borrowers and has counter-claimed for €25m judgment orders against the Lynchs.
In final submissions yesterday, Brian O’Moore SC, for the family, said Mr Conlan, given his financial position at the time and his level of borrowings with AIB, had to get Philip Lynch in on the Waterford deal.
Mr Conlan seemed to be one of the richest people in Ireland and “a titan of Irish business” at the time, counsel said. He was said to have a net worth of about €190m but also had borrowings of more than €250m when AIB’s own policy suggested a €114m borrowing limit.
While it was difficult to go back four years ago, Mr Lynch’s reliance of Mr Conlan getting a non-recourse loan was “totally rational” as Mr Lynch believed Mr Conlan was “in with AIB” and trusted him to deliver a non-recourse loan, Mr O’Moore said.