Companies fail in bid for ruling on whether their rights breached

A number of companies of hotelier Johnny Moran have failed in their bid to ask a court to decide whether their property and equality rights were breached when the former Anglo Irish Bank appointed a receiver over hotels and restaurants they operated.

The companies owned and managed the Holiday Inn in Pearse Street, Dublin, two restaurants in Dublin including Tante Zoe’s in Temple Bar, and the Blarney Inn in Kildare Street with its associated nightclub “Club Nassau”.

A receiver was appointed last year to Citywide Leisure Ltd, Blarney Inn Ltd, BCGM Ltd, JRM Hotels Ltd after Anglo, now the Irish Bank Resolution Corporation (IBRC) called in loans which the companies could not pay. Mr Moran is a director and shareholder of the companies.

The companies, and a fifth linked company, Aspere Property Investments Ltd, brought a High Court challenge to the appointment of the receiver claiming it was in breach of contract and their statement of claim was lodged in November last year. IBRC fully defended the claim.

Subsequently, the companies asked the court to amend their statement of claim in which they made a number of new allegations including that the bank had materially altered documents concerning security for the loans and that it had unlawfully given loans for the purchase of their companies’ own shares.

These amendments were not contested by the bank and were permitted by the court.

However, they were not permitted to amend the claim to allege their constitutional property rights had been breached because similar borrowers to them had had their loans with IBRC taken over by Nama, whereas theirs had not been taken over and remain on the books of IBRC.

They claimed that had their loans been taken over by Nama, they would have obtained continuing support for their business, the loans would not have been called in and a receiver would not have been appointed.

Yesterday, Mr Justice Brian McGovern ruled the companies could not make an amendment to their statement of claim on these matters.

He agreed with submissions from IBRC that the companies’ argument about their property rights being improved if the loans had gone to Nama was not something that could be laid at the door of the bank.