The High Court has ruled Bank of Scotland’s appointment of a receiver over a Dublin city centre bar and restaurant premises is invalid.
Mr Justice Paul Gilligan said the bank’s appointment of David O’Connor as receiver/manager of Foley’s Bar and the O’Reilly Bar at Merrion Row, Dublin 2, was invalid because the bank failed to comply with a formality.
That formality required the bank to make the appointment under its seal in formal writing. That requirement was in the mortgage agreement entered into with the owners and operators of the premises, said Mr Justice Gilligan.
The premises are owned and operated by Belohn Ltd and the judge noted the sole member of Belohn Ltd is a company, Merrow Ltd. Sean Foley and wife Sherry Yan are the common directors of both companies.
Belohn had extensive loan facilities with Bank of Scotland and, in Oct 2012, the balance due on those loans amounted to €4m.
In its High Court proceedings, Merrow objected to the receiver’s appointment on grounds including it had been made without Bank of Scotland writing under its seal.
Merrow had wanted to place Belohn, which has 27 employees, into examinership, the court heard.
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