O’Flynn: €5m loan for horses, home
The developer sought and received €2.5m to assist with the construction of his home and a further €1m to “purchase bloodstock” in January 2008. AIB loaned the remaining €1.5m to Mr O’Flynn for him to invest in a portfolio of shares.
The €5m loan, plus interest, was intended to be repaid within six months.
Details of the loans emerged in legal documents arising from a dispute between Mr O’Flynn and private equity giant Blackstone over control of his O’Flynn Construction Group.
The loan is one of three personal loans taken by O’Flynn which have been called in by Blackstone, resulting in the appointment of receivers to a number of companies owned by the Cork property developer and the subsequent appointment of an interim examiner to four main companies in the O’Flynn Construction Group.
The total value of the disputed personal loans is almost €17m.
Mr O’Flynn claims he would be able to repay the loans were he to be given a reasonable period of time to do so, but alleges that Blackstone afforded him just two-and-a-half hours to pay following a demand from the private equity firm.
The loans were passed to Nama and, subsequently, to Blackstone when the latter bought the O’Flynn Group’s €1.8bn debt for €1.1bn in May.
Mr O’Flynn has accused Blackstone of taking aggressive and deliberate steps to trigger a loan default and cause cashflow difficulties, with the intention of taking control of the O’Flynn Construction Group and its assets.
Mr O’Flynn argues that the personal loans given to him by AIB — including those to purchase racehorses and build his home — were outside the course of his ordinary business and, as such, he is entitled to protection under the Consumer Credit Act, which allows for a 21-day period for repayment of personal loans.
