Monaghan property company suing AIB over land deal

AIB is being sued by a Monaghan company that alleges receivers appointed by the bank sold land to Applegreen for several million pounds less than a price agreed between the company and the listed service station group just months beforehand.

The majority State-owned bank was acting as the lender for both the company, Silverstream Properties, and the buyer, Petrogas, which trade as Applegreen. The four sites were on the M1 and M2 motorways and have since been developed as filling stations.

Monaghan company Silverstream is now suing AIB for breach of contract, negligence and breach of both confidentiality and duty to avoid conflict of interests.

High Court filings claim AIB proceeded with a deal "significantly below" a previously agreed price of £5 million (€5.7 million), despite the bank's full knowledge of the prior higher price.

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The final proceeds from the sale agreed through receivership were around £2 million, according to filings from the receiver in early 2017 lodged with the Companies Office in Dublin.

Silverstream claims Applegreen’s solicitors had “settled” a price for the sites at £5 million with the company, based on emails between the parties in October 2012.

At the time Silverstream owed AIB around €2.5 million. The company had borrowed from the bank in 2005 to buy four greenfield sites along the two motorways.

Silverstream runs a shopping centre in Armagh and operates filling stations in both the North and the Republic.

Funding

Applegreen had funding to buy the four sites but told Silverstream during a September 2012 meeting it would be seeking a loan from AIB to build the filling stations, court documents seen by The Irish Times state.

Correspondence between AIB and Silverstream shows that the bank agreed to the sale price of £5 million plus VAT for the four sites in November 2012.

Silverstream then agreed to a request from AIB that the £5 million deal go ahead. On November 21st, 2012, the company agreed to AIB’s request that a receiver be appointed to the sites.

On December 19th Tom Kavanagh of Deloitte was appointed as receiver to the land involved in the transaction.

The deal with Applegreen stalled in January 2013. Court filings allege that it fell through as Applegreen said it could not secure development funding from AIB.

A number of weeks later a significantly lower offer was made by Applegreen, the court papers allege. This second offer was accepted and went ahead in early 2013, despite the bank’s full knowledge of the previous agreed price of £5 million.

Silverstream is seeking damages equal to the difference between the original price of £5 million and the lower price agreed between Applegreen and AIB when the company was in receivership.

Both AIB and Applegreen declined to comment on the land deal. Applegreen is not being sued in the case.