A developer being pursued by Anglo Irish Bank for €84m over unpaid loans of almost twice that sum has claimed he had 'easy access' to senior figures in the bank, including Sean FitzPatrick and David Drumm, and was actively encouraged to undertake massive property developments.
During 2006 and 2007, Anglo was 'extremely anxious' to lend money to his Limerick-based Fordham property group, Michael Daly said. 'Rather than I applying to the bank to borrow money, the bank met me on regular occasions to plan the future projects of the group.'
He was regarded as 'a favoured developer' in the mid-west region and could just pick up the phone to Anglo in Dublin and would be told to buy, Mr Daly said. His companies spent more than €300m on development projects here, plus more than €100m in projects in Germany.
In 2006 and 2007, Anglo was anxious that the group make additional investments in Germany and David Drumm made it clear funds of up to €500m were available, he said. Anglo also targeted his group for annual additional borrowings of up to €150m for various projects.
Representing himself, Mr Daly, 'Dalmin', North Circular Road, Limerick, said he had relied on oral assurances from Anglo executives that personal guarantees provided by him over loans were secondary to the security taken by the bank and would never be relied upon. But the Bank failed to take proper security and its handling of securities was 'a shambles', he said.
In an affidavit, Mr Daly said one loan of €91.2m was provided on the basis of his own guarantee, capped at €9.5m, plus a guarantee of his partners, also capped at €9.5m. He had raised the issues of the guarantees with the bank's senior executives a number of times and each time was assured they were regarded as 'a formality' and Anglo would never be relying upon them.
Anglo, through a receiver appointed by it, now has control of the relevant assets and, in those circumstances, it was absolutely premature to be taking action against him, he said.
Maurice Collins SC, for Anglo, said the bank was clearly entitled to summary judgment for €84.4m as Mr Daly, an accountant and experienced businessman, had accepted those monies were loaned and that he had signed the guarantees.
The claims by Mr Daly about his access to senior Anglo executives were not relevant to this application, counsel added, and he described as 'incredible' claims by Mr Daly relating to Anglo's approach to the guarantees.
Mr Daly had incorrectly asserted Anglo was suing only him and not others over the loans, counsel added. Anglo had taken proceedings against a number of solicitors allegedly involved in some of the deals who also allegedly provided guarantees.
Mr Justice Peter Charleton will on Tuesday continue hearing Anglo's application for summary judgment orders for €84.4m against Mr Daly arising from personal guarantees related to a number of loans to several companies engaged in developments in the Limerick region. Mr Daly is opposing the summary application and says he has raised an arguable defence.
The case relates to loans of more than €165m advanced by Anglo to three companies in the Fordham property group and two partnerships to buy lands and buildings in and around Limerick city and county for development and sale/lease, including office, retail and residential units and retirement homes. When it was not repaid by December last, the bank appointed a receiver over most of the assets of the companies.
Anglo claims Mr Daly was a director at all material times of Fordmount Property Group Ltd, (FPGL) Fordmount Developments Ltd (FDL) and Fordmount Developments (Savoy) Ltd (FDSL), all with registered offices in Limerick.
It also claims he was a 50% partner of the Fordmount Partnership and the St Munchin's House Partnership, both of Bishops Quay, Limerick. The other members in those partnerships were solicitors Dermot O'Donovan, Michael Sherry, Aidan Frawley and Thomas Dalton, all of whom held a 12.5% membership.
Anglo claims more than €165m is owed to it by the three companies and two partnerships. Under personal guarantees, the bank alleges Mr Daly has a liability for some €84.4m.
Mr Daly claims any loans entered into by the partnerships were done so as partners and any guarantees were on the basis of five guarantors. He claims his partners were four partners in the law firm, Dermot G O'Donovan & Partners (DGO'D), which, he alleges, was at all times the legal adviser to the Fordham property group and his own personal legal adviser.
