Mr Justice Peter Kelly yesterday agreed to fast-track in the Commercial Court the action by Komady Ltd and Michael O’Reilly, owners of Belgard Retail Park, Belgard Rd, Dublin, against Ulster Bank Ireland Ltd.
Michael Howard, counsel for the plaintiffs, said the bank was consenting to transfer and the sides had also agreed a timetable for exchange of legal documents. The judge approved that timetable and noted it meant the case would return before the court in May.
In their action, solicitors for Komady and Mr O’Reilly outlined the case relates to four loan facilities concerning the financing and indebtedness advanced for Belgard Retail Park. The park continues to successful, they said.
The case relates to two facilities made between Komady and Ulster Bank, one dated Jun 2005 for €24.5m and the second dated Jun 2006 for €2.5m. It also concerns two facilities made between the bank and Mr O’Reilly, one dated Sept 2005 for €24.4m and one dated Jun 2006 for €2.5m.
It is claimed the Belgard loan agreements were a result of the refinancing of older liabilities as the historic development of the site had been financed by Anglo Irish Bank.
It is alleged, after the loan agreements were executed, the bank or its servants or agents advised the plaintiffs to enter into the derivative agreements. Those facilities, which expired in 2011, are cross-guaranteed by the plaintiffs. It is claimed a large portion of the liability represented by the agreements was subject to a hedging arrangement to take account of any increase in interest rates over and above 5% for a significant period of time.
It is claimed the code of conduct for investment business under the Central Bank Act applies to the instruments but, it is alleged, the provisions of the code were not adhered to in relation to execution of the derivative agreements or in relation to the advice received concerning them.
It is alleged the agreements were not consistent with the best interests of the plaintiffs and were not properly explained to them. The “calamitous effects” of breaking out of the instruments were never explained nor was it explained that break benefits would accrue in certain circumstances, it is stated.