Courts

Michael Flatley denies default on €5.6m loan to his film company

Novellus Finance insists there was default on loan given to Blackbird Film Productions, for which Lord of the Dance Star provided a guarantee on the strength of the value of his Co Cork mansion, Castlehyde

Irish Dancer Michael Flatley pictured in 2004 at the restored Castlehyde, his property in Co Cork. Photograph: Provision
Irish Dancer Michael Flatley pictured in 2004 at the restored Castlehyde, his property in Co Cork. Photograph: Provision
Mon Dec 16 2024 - 16:35

Michael Flatley strongly denies a lender’s claims that there was default on a €5.6 million loan to the dancer’s film production company, the Commercial Court heard.

Novellus Finance Ltd insists there was default on the loan given to Blackbird Film Productions Ltd and for which Mr Flatley provided a guarantee on the strength of the value of his Castlehyde mansion in Fermoy, Co Cork.

As a result of the alleged default, Novellus appointed a receiver over Castlehyde but Mr Flatley and Blackbird moved to block the appointment by getting a High Court injunction earlier this month.

Mr Flatley, best known as a star in Riverdance and Lord of the Dance, also wrote, directed and starred in a 2022 film called Blackbird.

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He has also brought separate High Court proceedings against a building company and his insurers over alleged toxins found in his Castlehyde mansion after it underwent repair due to a fire in 2016.

The 66-year-old claimed that he, his wife Niamh and their son Michael St James, cannot reside at the protected structure, in which he said has invested over €29 million since he acquired it in 1999, as it is unsafe for human habitation.

In the latest proceedings against Novellus, its director William McManus and receiver Kieran Wallace, Mr Flatley and Blackbird claim the defendants are legally prevented from enforcing the security on the loan. Mr Flatley/Blackbird are also seeking damages for matters including alleged negligent misstatement, loss of opportunity/bargain and slander of title.

The claims are denied.

On Monday, Mr Justice Mark Sanfey agreed to an application from the Novellus plaintiffs to admit the case to the fast track Commercial Court.

In an affidavit, Mr McManus said there was default almost immediately on the €5.6 million loan which was drawn down in September 2023. Monthly payments of some €67,000 were due, and while one was made for October there were none between November and January, Mr McManus said.

Novellus, he said, exercised forbearance and when proposed refinancing arrangements failed to materialise, letters of demand for full repayment were issued, he said. This led to the three payments for previous months being made, he said.

Further refinancing proposals were put forward, but by October of this year Novellus issued a notice in event of default which precedes enforcement of the demand for repayment.

This led to the Flatley/Blackbird injunction application which prevented the receiver from taking any steps to take possession of or sell Castlehyde pending further order.

Kelley Smith SC, for the defendants, on Monday applied for the case to be admitted to the commercial list. She said the arrangement under which the money was loaned to Blackbird meant no one would be allowed to reside in Castlehyde, which made this a commercial transaction.

She said her side was contesting the basis for the granting of the injunction as they believed inaccurate information had been presented to the court. The receiver was concerned about whether the property is adequately insured and needed to gain access to it, she said.

Ronnie Hudson BL, for Mr Flatley and Blackbird, said the information presented for the injunction was correct. A gardener and housekeeper, who live on the grounds, had reported a white van parked outside Castlehyde and the occupants of the van identified themselves as being from a security company, he said. Mr Flatley and his wife were upset and shaken by these events.

Mr Hudson said the property was adequately insured. His side denied there was any default on the loan because the period between November 2023 and January 2024 was when the issue of toxins in the house was being dealt with. By February, the repayments were brought up to date, counsel said.

He also said his client’s solicitor, Max Mooney, is to go to Monaco, where Mr Flatley lives, over Christmas to get instructions from him.

Mr Justice Sanfey adjourned the matter after he adopted proposed directions for the progress of the case. He also directed a timeline for exchange of affidavits.