Businessmen claim ‘vulture fund’ has ‘concocted’ receiver appointment

Businessmen brothers Brian and David Stenson have claimed a "vulture fund" has "concocted" the wrongful appointment of a receiver over a commercial property owned by them in Finglas, Dublin.

Jarlath Ryan BL, for the brothers, told the High Court on Wednesday that Promontoria (Oyster) DAC was not entitled to appoint David O'Connor as receiver over the property at Century Business Park. Counsel said his clients are not in default of loans acquired by the fund from Ulster Bank in 2004 and the fund is attempting to put them effectively "out on the street". Mr Ryan, instructed by Downes Solicitors, said his clients maintain the fund is seeking to enforce premature payment of a debt owed by them in respect of the loans.

The fund had last February and September issued demands for repayment of just over €2 million and had claimed default on the loans acquired from Ulster Bank in 2016. While his clients disputed default on what they say are performing loans, the fund proceeded in October to appoint Mr O'Connor as receiver over the premises. As a result of that appointment, the brothers want various orders against Promontoria and Mr O'Connor of BDO, including injunctions preventing the defendants interfering with their property rights or using, letting or marketing the property.

In their proceedings, Brian Stenson from Donabate, Co Dublin, and David Stenson from Malahide, Co Dublin, contend no default of the loan agreement has occurred and seek declarations to that effect. They also seek declarations Promontoria is bound by the terms of the loan agreement acquired from Ulster Bank and Mr O'Connor is not entitled to act as a receiver in respect of the property.

Due to expire

The Stensons say they took out loans with Ulster Bank totalling just over €2.23 million which they used to acquire the unit and claims the loans are not due to expire until 2029.

Counsel said the premises were leased to a petfood wholesale business but a new tenant, a logistics business, has been in place since 2017. Promontoria had refused to consent to the new lease and its refusal was without commercial rationale or merit, counsel said. How, he asked, could his clients pay the mortgage without tenants in place? The lack of consent was an attempt to engineer an artificial default so the “vulture fund” could call in the loans, he argued.

Counsel said payment on the loans is fully up to date and Promontoria is ignoring the construction of the correct construction of the loan agreements. When the matter came before Ms Justice Leonie Reynolds on Wednesday, she granted Mr Ryan permission, on an ex parte basis, to serve short notice of the proceedings on the fund and Mr O'Connor and retuned the matter to next week.