Court rejects Danske action over loan funds

Danske Bank has failed to get a High Court order striking out an action by a liquidator alleging the bank manipulated an insolvent company’s finances to its own advantage and the disadvantage of Revenue, which is owed €2.2 million in unpaid VAT.

Andy Garcia, as liquidator of Panshire Ltd, claims its directors Mark Kilkenny and Patrick Rooney are personally liable for around €7 million from the sale of apartments. Some of the money was allegedly wrongly used to discharge personal debts to Danske rather than to pay Revenue, he claims.

Mr Garcia, in Commercial Court proceedings, alleges Danske “manipulated” the finances of Panshire leaving Revenue and other trade creditors disadvantaged.

Mr Justice John Hedigan refused Danske’s application after finding it delayed too long in bringing it.

In its application, the bank sought a declaration it had priority over any claims. In the event it had, the case should be struck out as having no reasonable cause of action and/or because it was frivolous, vexatious and/or bound to fail, it claimed.

Mr Garcia, of Copsey Murray Chartered Accountants, was appointed liquidator in August 2011 after Panshire was put into voluntary liquidation. Panshire was set up in 2004 to build the 88-unit Clearstream Court apartment complex at McKee Avenue, Finglas in Dublin.

Mr Justice Hedigan said Danske advanced to Mr Kilkenny a total of €24 million to buy the site and build the apartments on it.

The first 30 apartments were sold and the bank received a substantial sum of the money and applied it to the reduction of Mr Kilkenny’s loans, the judge said.

The bank argued the loans to Mr Kilkenny were specifically given on the basis they were to be repaid from the proceeds of apartment sales.