A dispute between companies of developer Johnny Ronan and the Fortress Investment Group, which has financed some €1 billion worth of commercial property projects, has been admitted to the Commercial Court.
The Ronan-related companies are seeking damages for alleged breach of contract, unlawful interference with contractual relations and/or inducing breach of contract and/or negligence and/or breach of duty.
They seek declarations including that by failing to engage with the plaintiff firms’ effort to refinance facilities under a development assets facility agreement and a mezzanine facility agreement, the defendants have breached an obligation not to clog, stymie or otherwise hinder redemption rights under those agreements.
They also want the court to declare that the defendants have been unjustly enriched by reason of the work done by the plaintiffs on developments at Spencer North and South and Fibonacci Square in Dublin. That work had greatly enhanced the value of those developments for the defendants, it is claimed.
Markets in Vienna or Christmas at The Shelbourne? 10 holiday escapes over the festive season
Stealth sackings: why do employers fire staff for minor misdemeanours?
Michael Harding: I went to the cinema to see Small Things Like These. By the time I emerged I had concluded the film was crap
Look inside: 1950s bungalow transformed into modern five-bed home in Greystones for €1.15m
The claims are denied.
The proceedings have been brought by RGRE J & Ltd, RGRE Borrower Ltd, J & Lehaunstown Ltd Partnership, J & Fitzwilliam Ltd Partnership and RGRE Sen Borrower Ltd against Collir SARL, Fortress Investment Group LLC and CF Troy Holdings LLC. Collir and CF Troy are both indirectly owned by funds managed or advised by affiliates of Fortress.
On Monday, Mr Justice Denis McDonald admitted the proceedings to the Commercial Court on the application of Lyndon MacCann SC, for the defendants, and on consent of the plaintiffs.
Mr MacCann said his clients wanted finality to the dispute and there has been “a history between the plaintiffs and defendants”.
In an affidavit seeking entry of the case to the commercial list, Shalini Shanthikumar, senior vice-president/legal counsel of the Fortress group, said it was clear from the orders sought that the proceedings principally related to commercial loan facilities advanced by Collir to the plaintiffs.
These related to a development assets facility agreement of March 24th, 2015, and later amended in 2022 relating to an original mezzanine facility agreement of March 2015.
Ms Shanthikumar said the plaintiff companies’ collective liabilities to Collir in connection with those agreements is more than €93 million, which does not include an exit fee, which the plaintiffs say is €21 million and the defendants say is €33 million.
The defendants strongly believe the proceedings were brought with the sole objective of obstructing Collir’s exercise of its contractual rights under the agreements, she said.
The plaintiffs’ respective liabilities are subordinated to the liabilities of a number of Ronan Group companies, including RGRE J & and RGRE J & Borrower, under a senior facility agreement with Bank of Ireland as agent and security trustee under a “senior facility agreement”, she said.
A €10 million payment obligation has fallen due at the end of July 2023 and the defendants do not believe the Ronan companies will be in a position to discharge, she said.
No explanation has been offered by the plaintiffs as to why they commenced the proceedings now though the complaints arose before last January 20th, she said.
The defendants believe the situations the Ronan group has orchestrated on the Spencer North and Fibonacci developments had the objective of forcing Collir to accept a refinancing proposal that is not in Collir’s commercial interest, she said.
Ms Shanthikumar also said this was against the background of separate proceedings in 2021 brought by Ronan Group Companies over the sale of assets to CF Troy by the Ronan former co-investor, Digitalbridge Group. Those proceedings were settled in February 2022.
Subsequently, a senior lender for the Ronan family portfolio appointed a receiver to 12 properties in that portfolio. Following negotiations, new versions of the 2015 development agreements were drawn up and the receiver was discharged.
Ms Shanthikumar said Collir agreed to facilitate the refinancing of senior debt in good faith. Without it, she said, the underlying assets of the Ronan family portfolio would for the most part now be sold.
The situation in which the plaintiffs now find themselves is “entirely of their own making”, she said.
Had Collir accepted the refinancing proposal from the plaintiffs last January, just two days before the exit fee was reinstated last January, it would have resulted in Collir recovering just 57 per cent of the debt due to it, she said.
