Builder pursued for €7.5m over development loans

Jersey-based builder David Kennedy is being pursued at the Commercial Court for a further €7.5m by Bank of Scotland over guarantees of loans to building companies.

The bank’s summary judgment proceedings are to be fast-tracked by the court in tandem with separate proceedings in which it is claiming another €8m in judgment orders against Mr Kennedy arising from his alleged limited guarantee of a €260m loan.

The €8m proceedings were transferred to the court last week and the latest proceedings — for €7.5m — were transferred yesterday on the application of Kelley Smith, for Bank of Scotland.

Mr Justice Peter Kelly directed the bank’s summary judgment applications in both cases will be dealt with on Jul 31 when he will decide whether any defence has been raised entitling Mr Kennedy to a full hearing.

Mr Kennedy was involved in Clancy Quay Properties Ltd (CQP) which paid €25m for the 13.5 acre site of the 19th century Clancy Barracks site at Inchicore, Dublin. Purchase and development loans were financed by Bank of Scotland (Ireland) and National Irish Bank.

Both banks, now owed €260m, later appointed receivers.

In its first action against Mr Kennedy, Bank of Scotland, acting as security trustee for loans advanced by it and NIB, claims development loans of €260m were advanced to CQP on foot of securities including a guarantee of Mr Kennedy limited to €8m.

Mr Kennedy, the court heard, will argue he is not liable to repay any sum.

In its second action, the bank wants €7.5m summary judgment orders arising from guarantees of Mr Kennedy of the debts of Davitt Road Developments to a maximum €3m, plus interest and costs; and of three other companies — Rimley Ltd, Eirmur Ltd and Florence Investment Properties Ltd — to a maximum €1.5m for each company plus interest and costs.