THE National Assets Management Agency, in the first court application of its type, has secured multi-million euro summary judgment orders against three businessmen – Patrick Shovlin and hoteliers Patrick and Anthony Fitzpatrick – over unpaid loans to their companies by Bank of Ireland.
The loans included a €280 million loan to a company for the Beacon South Quarter development in Sandyford.
Mr Justice Peter Kelly in the Commercial Court queried why Bank of Ireland had agreed to limit the businessmen’s liability under guarantee for that amount to about 5% of the sum due. Mr Justice Kelly asked where was “the commercial logic” in the bank agreeing to limit the liability under guarantee to such an extent that there was no recourse to about 95% of the debt. “Why would a bank do that?” he asked.
Summary judgment for €38.5m was entered against Mr Shovlin and for €22m each against the Fitzpatricks in favour of NAMA.
Ulster Bank immediately afterwards secured a €6.4m summary judgment order against Mr Shovlin, bringing total orders against him to almost €45m, and €3.27m summary judgment against both Fitzpatricks, bringing their total to more than €25m each.
Mr Justice Kelly observed “it hasn’t been a good day” for the three.
The defendants did not defend any of the proceedings.
Rossa Fanning, for NAMA, said he didn’t have an answer to that question but it appeared the bank’s recourse was intended to be the assets of the company, the Beacon project, as the loans would have been advanced when the project was expected to yield better returns.
Mr Fanning stressed NAMA was not compromising its own entitlements as it had brought the proceedings suing for all that it was entitled to under the BoI contracts.
Counsel was moving the proceedings by a NAMA company, National Asset Loan Management Ltd, against Mr Shovlin, Turnberry, Kerrymount Avenue, Foxrock, Dublin; Patrick Fitzpatrick, Dargle Lodge, Cookstown Road, Enniskerry, Co Wicklow; and Anthony Fitzpatrick, Amberley, Kerrymount Avenuem, Foxrock.
NAMA brought the proceedings over guarantees provided by the three over loans by BoI, including a loan to part finance BoI’s own headquarters at Baggot Street, Dublin 2, and loans for the Beacon development.
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