A syndicate of banks that provided funds to companies of developer Sean Dunne towards acquiring the Jurys and Berkeley Court hotels in Ballsbridge for €400 million has settled court proceedings brought to get possession of those properties.
The case was initiated after Mr Dunne, having been informed on December 23rd last his company must vacate the hotels on January 1st as the syndicate was not renewing short-term letting arrangements, refsued to yield possession until several outstanding issues were resolved, including about a rent rebate.
The syndicate argued Mr Dunne had no defence to the claim for possession and also claimed he was indebted to it for more than €259 million under his personal guarantees of liabilities of DCD Builders Ltd, the parent company in the Dunne group.
Payment of that sum was demanded from DCD on January 5th last and the syndicate would be entitled to call on Mr Dunne’s guarantees, it was also stated.
Mr Justice Peter Kelly, who noted he was previously given “disquieting information” that an “extortionate sum” was sought before Mr Dunne would give up possession, was told of the settlement of the case when it came before the Commercial Court today.
Lyndon MacCann SC, for the banks’, said MJBCH Ltd (a company of which Mr Dunne and Ross Connolly are directors) had agreed to give up possession while another company, Mavior (ultimately owned by Mr Dunne’s wife Gayle Killilea), had arranged for transfer of title to the hotels’ fixtures and fittings.
In those circumstances, the judge struck out the proceedings and, on agreement, made an order for costs to be paid by MJBCH with no order for costs against Mavior. Asked by the judge whether the “extortionate” sum sought was paid, counsel indicated the agreement reached was “other than that”.
The syndicate of lenders – led by Ulster Bank - said in an affidavit it has entered into short-term letting agreements with Tulane Business Management Ltd for lease of the hotels, expected to trade for some years while the banks decide the best strategy for recovery of as much of their money as possible.
Mr Dunne had planned to build a €1.5 billion high-rise mixed development, with a 37- storey tower as the centrepiece but that plan was rejected in January 2009 by An Bord Pleanála and the hotels were reopened under the D4 brand.
The court proceedings were taken by Zrko Ltd and Qulpic Ltd - owned by a syndicate of Ulster Bank Ireland Ltd, ACC Bank plc and Kaupthing Singer and Friedlander Ltd (in administration) - against MJBCH Ltd and Mavior.
Companies Office searches indicated Mavior, of which Ross Connolly and Ms Killilea are directors, was ultimately owned by two Isle of Man companies - Zabingo Ltd and Zintala Ltd - with Ms Killilea appearing to be the ultimate owner of those entities.
Nama appointed a receiver over certain assets of Mavior in July 2011.
On foot of loans made in 2005 and 2006 to DCD Builders Ltd, the hotel properties on seven acres were acquired by October 2007 and lease agreements concerning them were later entered into with MJBCH.
In late 2009, Mr Dunne and the syndicate agreed arrangements whereby the plaintiff companies were incorporated by the syndicate to acquire the hotels. Short-term letting agreements were also entered into.
The syndicate alleged, despite expiry of the short-term letting arrangements in December 2011, possession of the hotels was not yielded up. Issues arose including concerning sale of hotel fixtures and fittings owned by Mavior, insurance covering flooding at the Jurys site, and payment for reinstatement works carried out by Mavior.
The plaintiffs said they had not to date paid rent rebate monies to MJBCH because it had not paid a substantial amount of outstanding rates owed to Dublin City Council in circumstances where the company was in unlawful occupation of the hotels since January 1st.
It was also claimed a secuirity allegedly granted by MJBCH to Mavior without the prior agreement of Ulster Bank breached agreements with the bank.
The plaintiffs also said confusions had arisen about ownership of fixtures and fittings of the hotels but they were advised last December by Ms Killilea those were owned by Mavior for her benefit. The banks claimed MJBCH was not entitled to refuse possession until the sale to the plaintiffs of the fixtures and fittings were completed or for any of the other reasons advanced.
