Mr Sheehan claims the appropriate figure for redemption of his loans is €16.5m but Breccia, which the Commercial Court heard acquired the loans from the State-owned IBRC for €17.3m, has sought some €3m more than that.
The €19.6m figure is “a deliberate tactic” and “a form of attrition” by Breccia to wear down Mr Sheehan in such a way his financiers would eventually lose interest and “disappear” and he would be unable to raise the necessary finance to redeem his loans, John O’Donnell, for Mr Sheehan, said.
Mr Sheehan was told by IBRC in 2014 it would cost €16.1m to redeem the loans but in June 2015 Breccia told him the price was €19.6m, counsel said.
Breccia was not entitled to add surcharge interest and “enforcement” costs totalling almost €3m, Mr O’Donnell argued. The surcharge interest was an “unenforceable penalty” of some €2.1m while the enforcement charges were an “extraordinary” sum of €93,000, based on €68,500 solicitors’ fees and €24,600 counsel’s fees up to June 2015, Mr O’Donnell said.
That €93,000 sum was sought for sending one letter of demand and dealing with Mr Sheehan’s injunction proceedings in which effectively no injunction hearing took place, he added.
Mr Sheehan was seeking effective court orders that would allow him to redeem his loans at a fixed redemption figure and prevent Breccia obstructing that redemption, counsel told Mr Justice Robert Haughton.
Breccia denies the claims and argues it is entitled to seek the €19.6m.
Brian O’Moore, for Breccia, said his client had paid IBRC some €17m for the loans, plus expenses of almost €300,000.
Among various pleas, Breccia claims general corporate conditions attached to the relevant loans which entitles it to levy the disputed charges on the loans.
The case arises from loans totalling almost €18m which were made by Anglo to Mr Sheehan in 2006 and 2008. The loans were later taken over by IBRC and ultimately sold to Breccia.
Mr O’Donnell said the loans, contrary to what Breccia alleges, were not corporate loans. At all stages, the only interest charged was 1.75% over the Euribor rate, which was the interest provided for in the facility, he said.
The case continues.