Clinic shareholders lose €2.4m order

Two of the main shareholders in Dublin’s Blackrock Clinic have lost a bid to prevent summary judgment against them for €2.4m over the financing of their effort to buy out loans with Irish Bank Resolution Corporation (IBRC).

Talos Capital Ltd sought the order against Joseph Sheehan and John Flynn over what it claimed was “material” default on a loan agreement.

Yesterday, the High Court ruled Talos was entitled to the order but adjourned entering judgment for a week to allow the men seek a stay on the decision, pending appeal.

Mr Justice Sean Ryan said the €2.4m was provided as a 10% deposit on a bid by a company, JCS, whose liabilities were guaranteed by the two men, to buy out their loans relating to the Blackrock Clinic business.

The loans, originally given by the former Anglo, were taken taken over by its successor IBRC which put them up for sale.

Under the proposal, JCS was to get a loan of €24m which was to be used to buy from IBRC loans charged on shareholdings in Blackrock Clinic of Mr Sheehan, Mr Flynn and Dr George Duffy. The three together had a 56% shareholding in the clinic.

On April 7, Talos transferred a loan for a 10% deposit (€2.4m) to the IBRC, which had by then been put into special liquidation. A week later, however, Talos learned that the loans of Dr Duffy, who held 20% of the 56% shareholding in Blackrock, had been separately sold by the IBRC liquidators.

Talos said this changed the nature of loan agreement, that

this was a breach of the defendants’ obligations and it was entitled to immediate repayment of the €2.4m.

Mr Justice Ryan accepted Talos’ arguments.

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