Rhatigan firms seek order against equity fund moves

Companies in the Rhatigan property group have claimed an international equity fund is trying to get control of some of its assets, including the Radisson Blu Hotel at Golden Lane, Dublin.

In Commercial Court proceedings, the Galway-based Rhatigan firms want orders restraining Beltany Property Finance Ltd enforcing the appointment of a receiver over the hotel arising out of a letter for demand of repayment of €39.8 million in loans and securities.

The case was admitted to the Commercial Court list by Mr Justice Brian McGovern yesterday on consent of the parties.

In an affidavit, Padraic Rhatigan, a director of the firms, said the loans, originally taken out in 2007 with Ulster Bank, were sold last year to Beltany, a subsidiary of the Goldman Sachs multinational banking group.

Restructured

The loans had been restructured in 2009 when Ulster Bank took additional security in relation to non-hotel finance facilities with the result all income from non-hotel assets in the Rhatigan group would go to pay off interest on the loans for three years.

Under the hotel ownership structure, one of the Rhatigan companies, Luxor Investments, could buy the Radisson Blu on the occurrence of certain events within seven years, expiring on December 24th, 2014, Mr Rhatigan said.

The hotel’s operations have always been sufficient to meet interest payments and last year it recorded a profit of €2.8 million, he said.

The loans were restructured again in 2013. In March 2014, Ulster Bank asked the Rhatigans to co-operate in the sale of the firms’ loans and securities to Goldman Sachs as part of the bank deleveraging its loan book, he said.

Mr Rhatigan said he engaged in this process in a spirit of good faith and co-operation.

Discussions

Last October, Ulster Bank notified Rhatigans it had agreed the sale of the loans to Beltany, he said.

Mr Rhatigan said discussions between Rhatigans and representatives of Beltany and Goldman Sachs took place but broke down for a number of reasons, including commercial considerations, asset valuation and interpretation of restructuring facilities.

In the last few weeks, the Rhatigan companies had found an alternative funder to refinance the loans and this was at an advanced stage as of last Tuesday, he said. Mr Rhatigan said the defendant was asked not to take any enforcement steps in relation to the appointment of the hotel receiver but it had only agreed to a qualified undertaking.

Mr Rhatigan said the defendant’s conduct was unlawful, had potential to inflict long-term reputational and commercial damage on his firms and risked jeopardising the refinancing proposal.