Couple sued by Bank of Ireland owe €886m

SOLICITOR AND property investor Brian O’Donnell and his wife owe €457 million to investment bank Morgan Stanley and €235 million to German property bank Aareal among their total borrowings of €886 million, according to a statement of affairs submitted in court.

The O’Donnells, who are being sued by Bank of Ireland for €69.5 million over unpaid property loans and guarantees, have valued their assets at €1.089 billion. All but €1.9 million relates to property.

The couple also owe €97.7 million to AIB on an office block at 2099 Pennsylvania Avenue near the White House in Washington DC. They value the office building at €138.4 million.

A further €96.6 million in borrowings is listed but the statement does not identify the lenders.

The statement, dated July 31st, 2010, shows that the O’Donnells have net property assets of €110.5 million after loans and the associates’ interests in the properties.

Their most valuable property is the Fatburen building, the largest office block in Stockholm, which was worth €278 million, according to the couple’s statement.

Aareal Bank’s €235 million loan is secured on the building. The bank refinanced the loan on “draconian terms”, Mr O’Donnell told Bank of Ireland in a letter dated September 17th, 2010.

The bank’s case against Mr O’Donnell, a former managing partner of William Fry solicitors, and his doctor wife, has been listed for hearing in the Commercial Court on March 3rd.

Mr O’Donnell estimated that he would have €2.1 million in funds for the year to June 2011, of which €500,000 was practice income from his commercial law firm, Brian O’Donnell Solicitors.

Some €504,000, the largest single source of funds, would be earned in rent from a building at 17 Columbus Court in Canary Wharf, London’s financial district.

The building is leased to investment bank Credit Suisse and is managed by Mr O’Donnell’s property investment firm, Vico Capital.

He valued the building at €146.7 million last July and owes €128.5 million to Morgan Stanley in borrowings drawn on the property.

Another building in Canary Wharf, at 15 Westferry Circus, is valued at €187 million on the statement and has loans of €156 million due on the building to Morgan Stanley, which leases the property.

Irish residential properties valued at €43 million include the couple’s properties on Vico Road in Killiney and Ailesbury Road in Ballsbridge, and “a lakeside country estate on Lough Corrib” at Oughterard in Co Galway.

A ski chalet in the French resort of Courchevel is valued at €13.2 million and has been on the market for more than two years.

The bank wrote to Mr O’Donnell last August raising concerns about the statement of affairs received earlier that month, saying the property valuations seemed “excessively high”.

The lender also questioned the certainty of generating €2.1 million in income in the year to June 2011 “against a background of a paucity of income accruing over the last two to three years”.