DÚN LAOGHAIRE-Rathdown County Council has moved to protect its €57 million interest in a joint venture with the troubled property developer Liam Carroll.
The council is involved in a joint venture with Mr Carroll to develop a science and technology park at Cherrywood in south Dublin.
It will today ask the High Court to declare that it owns one-third of the land on which the development is planned. It also wants the courts to prevent Mr Carroll from being able to sell the land and also prevent two of his banks from seizing the land on foot of Mr Carroll’s debts.
Mr Carroll is one of the country’s largest property developers and is in serious financial difficulties.
The courts are expected today to decide in separate proceedings whether a part of his empire, the Zoe Group, which is insolvent with debts of €1.2 billion, should be wound up or else put into examinership and given a chance to trade out of its difficulties.
Lawyers for Dún Laoghaire-Rathdown County Council did not specifically mention Zoe Group’s difficulties when they sought to have the case admitted to the Commercial Court – part of the High Court which hears only large cases – at short notice yesterday.
However, their lawyer Pauline Walley SC, said there were issues surrounding the various defendant companies which are “in other fora”.
There were also commercial sensitivities and other matters which had moved on “in the wider financial matrix”, she said.
She said the joint venture agreement was entered into with the eight companies but certain events had happened in relation to the other defendants of which the council was unaware which put at issue the contract itself.
Asked whether an examinership application was involved, Ms Walley said that the companies were not covered by an application for examinership but may be part of a “labyrinthine corporate structure” which may affect them.
The judge said she could bring the motion to court today.
The council has also listed Zoe Group’s two biggest creditor banks AIB and Bank of Scotland (Ireland), as defendants. They are owed over €700 million by Zoe Group.
The court was told yesterday that the council wants a declaration that it owns a third or more of the lands subject to the joint venture agreement of August 1997. It is also seeking orders restraining the companies dealing with or selling the lands.
It is also seeking declarations that all loan charges or mortgages on the lands for the benefit of the two defendant banks or others are subject to the council’s legal and beneficial interest in the lands.
The council also wants a declaration that any charges or mortgages created over the lands without its agreement are invalid. It also claims damages alleging breach of trust, breach of contract, misrepresentation and unjust enrichment.
The action has been taken against eight companies – Cherrywood Science and Technology Park, Cherrywood Properties, Craddder, Frescatti, Giotti, Vienesse, Nervana and Precidence – all with addresses at Chapel House on Parnell Street, Dublin 1.
The council’s application was made ex-parte, meaning that only one side was represented in court.
Mr Carroll’s representatives couldn’t be reached for comment.
In another legal action yesterday, Mr Justice Kelly gave Mr Carroll a reprieve from a claim by Irish Nationwide Building Society for €60 million against him personally as a result of a guarantee provided over liabilities of a development company controlled by him.
The judge ruled that the dispute between the society and Mr Carroll should go to full hearing as he made an arguable defence to the building society’s claim.
The Government is today expected to publish the legislation establishing the National Asset Management Agency.