Stressed O'Donnell describes his situation as 'torrid', 'tragic' and 'sad'

PROPERTY INVESTOR and solicitor Brian O’Donnell described his financially distressed situation as “torrid”, “tragic” and “sad” as he was quizzed on disparities in statements he and his wife made about the ownership of property assets.

The one-time managing partner of Dublin law firm William Fry was subjected to four hours of cross-examination by Paul Gardiner SC, for Bank of Ireland, which is trying to recover €75 million and clear up confusion around the ownership of London properties.

Once one of Ireland’s high-flying property investors snapping up so-called international “trophy” assets, Mr O’Donnell and his Vico Capital property business, which had assets once worth €1 billion, is now in financial ruins.

He accepted that the couple owed Bank of Ireland money but he lamented the fact that the value of the properties were “tumbling” due to the bank’s public actions.

He said a £128 million loan on 15 Westferry Circus in Canary Wharf, London, which is leased to the bank Morgan Stanley, was due to be refinanced on Friday. The bank has sought a charging order to register a claim against the property and this meant it was likely to end up in receivership by the end of the week, he said. “It has caused absolute havoc.”

He described the crisis as “a world meltdown” and “the worst since 1929” and it was not being dealt with correctly at home. “In Ireland there is no work-out,” he said, pointing to how distressed assets were dealt with here compared to in London and New York, where work-outs were “done quietly and not in the full glare of publicity.”

Since December, when the bank secured a judgment against the O’Donnells, it has raised concerns that properties that the couple previously said were either owned in full or in part by them were later shown in statements filed by the O’Donnells to be held in trust for one or more of their four children.

“We cannot engage any more – we are at our wits end,” said a stressed Mr O’Donnell in the witness box, explaining how he had made eight proposals to the bank before he and his wife “had to” file for bankruptcy in London last month.

As far as Mr O’Donnell is concerned, the case in London appears to take precedence over the case in the Commercial Court. He repeatedly said he could not provide information to the bank as this would prefer the bank over other creditors before a hearing in London on June 14th in the couple’s bankruptcy proceedings.

Mr Gardiner tried to determine the discrepancies in statements on the ownership of the Westferry Circus property and two others, at Barton Street in London and Columbus Courtyard, also in Canary Wharf, which is owned by a company in the British Virgin Islands.

Mr Justice Peter Kelly asked Mr O’Donnell whether Vico Capital was a limited company, a partnership or registered business name.

Mr O’Donnell said it was an Irish-registered company that never traded and an “umbrella” name, much like Morgan Stanley or Coca Cola, by which his business is best known. Asked who was behind various companies or who was the “we” in some documents, he said: “My wife and I.”

The judge said Mr O’Donnell seemed to use Vico as a partnership for himself, his wife and his son “as the mood takes you”. He disagreed with the judge’s view that a partnership that “comes and goes” appeared “very shadowy”.

The judge, at times exasperated with Mr O’Donnell’s answers, asked whether he was “going into Alice in Wonderland territory again ” over his claims about a statement showing that he owned assets when they were in fact held in trust for his children.

“Come on, Mr O’Donnell, that is not an answer that does you any credit,” said the judge in reply to his answer about a statement of net worth showing that he owned the properties. Mr O’Donnell accepted he did not. He also accepted it was untrue to show him as the owner of Westferry Circus on documents agreeing loans with Morgan Stanley on the property in 2006.

He was unable to produce trust documents, requested by the bank on April 4th, showing the beneficial ownership of properties in London. He complained that he had been on a flight from London yesterday for eight hours that had been delayed by two bomb scares and was redirected to Belfast.