Breccia ordered by Commercial Court to lower loan cost

A shareholder in Dublin’s Blackrock Clinic is entitled to an order that he need pay €16.9m, rather than nearly €20m, to redeem a loan he took out to invest in the facility, the Commercial Court ruled.

Joseph Sheehan, a consultant surgeon based in the US and one of the founders of the clinic, claims a company controlled by businessman Larry Goodman, which bought the loan from IBRC, engineered a situation where he is not receiving dividends which he needs to pay off the loan.

The full case is yet to be heard, but yesterday, Mr Justice Robert Haughton made rulings in relation to a number of matters including how much Mr Sheehan would pay the Goodman company, called Breccia, if he was to redeem the loan.

He also ruled, in a separate case taken by another clinic shareholder, John Flynn and a company he is director of, Benray, that the redemption figure in relation to their loan was €9.3m and not the €11m sought by Breccia.

The judge found Breccia could, in accordance with the original 2006 loan contracts, which were with the former Anglo Irish Bank, claim the higher redemption figures in both cases.

However, he found that part of Breccia’s redemption figure contained an unlawful penalty. This related to a 4% interest surcharge, where there is default on the loans, of more than twice the normal rate. In Mr Sheehan’s case, that is a total of around €3m.

He said Breccia was prevented by previous actions or determinations from claiming all or part of its actual redemption figures up to June 19, 2015. However, from then on, it is entitled to claim it on account balances, he said.

Breccia could charge costs, charges, and expenses in relation to enforcement of the loans but not in the amounts it sought, he said.

Mr Sheehan, who founded the clinic in 1986, along with his brother James, George Duffy, and the late heart surgeon Maurice Neligan, claims in his main proceedings that Breccia attempted to engineer a situation so he would be excluded from the business.

He claimed Breccia “took advantage” by buying the loans, which he got to purchase shares in the clinic business, for the purpose of now trying to acquire his shares, he says.

The case arises out of the sale in 2006 by health insurer BUPA of its 56% shareholding in operating company, Blackrock Hospital Ltd, to a number of others, including Breccia and shareholders.