A Director of a company which once owned the Ormonde Hotel in Dublin told the Master of the High Court yesterday his company purchased the hotel in 1987 for £400,000 but sold it a few years later for £1.9 million.
However, Mr Daniel Ryan, a director of Humewood Ltd, said the company which purchased the Ormonde for £1.9 million subsequently went into liquidation owing £250,000 to himself and his partner, Mr Des Coffey.
The new owners thought they were buying a Grade A hotel and they also encountered a period of high interest rates, Mr Ryan said.
"They were about 10 years too early," he told Ms Grainne Clohessy, counsel for the liquidator to Fawnside Ltd, Mr Billy O'Riordan, who was appointed in March 1998.
The Master of the High Court, Mr Harry Hill SC, was hearing an examination into the affairs of Fawnside Ltd.
The Master heard Fawnside had operated the hotel on a lease and option-to-purchase basis from 1991 onwards and also went into liquidation.
Its directors were also Mr Ryan and Mr Coffey.
Mr Ryan said he agreed to this proposal in order to protect the £250,000 which was owed to Fawnside.
He said he left Fawnside in 1995 and believed a company called Ormonde Inn Limited subsequently purchased the premises.
His relationship with his fellow director Mr Coffey had "dwindled" from the start.
He was looking forward to the hotel being sold for a good price so he could get his half share of the £250,000.
At one stage he tried to sell his share in Fawnside to an American for £100,000 but this fell through when Mr Coffey objected to taking in the American as a partner.
He had asked Mr Coffey for the figures on how the hotel was doing but never received them.
He thought the Ormonde was doing well in the period under lease.
Mr Ryan said his fellow director was driving around town in a big car and there were large crowds attending the hotel disco.
In 1993, Mr Coffey told him "things were not as great as they seemed" but he did not believe him, Mr Ryan said.
Mr Ryan recalled a meeting with Mr Coffey in a pub in Milltown, Dublin where he asked Mr Coffey about rumours of drug-selling in the disco at the Ormonde.
He said Mr Coffey had said he too had heard those rumours and had added: "What club in Dublin does not sell drugs?"
When he left Fawnside, he received an indemnity from Mr Coffey, Mr Ryan said.
He believed everything was above board and correct.
Mr Coffey is expected to be examined by the Master today.