Ulster Bank halts action of Dublin developers

Ulster Bank has won a High Court order preventing the developers of a Dublin retail park from proceeding with an action in which it was claimed the bank contrived a situation in order to call in €24m loans.
Ulster Bank halts action of Dublin developers

Komady Ltd, owned by James Flynn and members of his family, along with business partner Michael O’Reilly, last year failed to get the court to continue an injunction stopping a receiver selling Belgard Retail Park in Tallaght.

Its tenants include B&Q, Mothercare, and Halfords.

Ulster Bank then applied to have the entire action struck out as unsustainable and an abuse of process.

Mr Justice Raymond Fullam yesterday said he was satisfied to grant the bank’s application to dismiss the action.

He said there was a failure to establish a prima facie case of bad faith in relation to the bank exercising its contractual right to demand repayment of the loans of €24.2m each given to Komady and Mr O’Reilly in 2005 to refinance loans from Anglo Irish Bank for the retail park.

“There is no evidence the bank engineered a loan default on the part of the plaintiffs in this case,” he said.

The bank denied it contrived to manufacture a default situation to call in loans owed by Komady and Mr O’Reilly.

Lawyers for both claimed a site adjoining the retail park, over which the bank had also appointed a receiver, would increase in value by between €10m and €15m, if it and the retail park could be sold together.

Access to the other site would be via a right-of-way “ransom strip” through the retail park, the court heard.

In August 2014, the bank demanded immediate repayment of the loans which were advanced in 2005 to acquire the retail park.

When they were not paid, receivers were appointed. Komady and Mr O’Reilly obtained an interim injunction preventing the receiver selling the property but the court refused to continue this.

They had claimed the bank was not entitled to immediate repayment, that the loan repayments were being met, and the loan facility had another 10 years to run.

It was claimed the bank had an ulterior motive in calling in the loans in order to enhance the value of the adjoining site.

The bank claimed the plaintiffs were experienced developers, fully aware of their obligations.

Mr Justice Brian McGovern refused to continue the injunction, rejecting the claim of ulterior motive.

He said there was no issue to be tried.

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