A garda inspector shut down the bar of the Ormond Hotel in Dublin last year, while the property was up for sale, because he did not like gay nights being run there, the Master of the High Court was told yesterday.
After the bar was shut down, interest in the property had changed, resulting in a sale price of £2.2 million instead of the £2.8 million offered before the sale, according to Mr Desmond Coffey, a director of Fawnside Ltd, which leased the hotel from 1991 to 1995. Mr Coffey, who was also a director of Ormond Inns Ltd, which owned the hotel from 1995 to 1997, said if Ormond Inns had accepted the pre-auction offer the present investigation by the Master into the company's affairs would not be taking place. There would be enough money to meet all Ormond Inns' liabilities.
He was giving evidence before the Master, Mr Harry Hill SC, who is conducting an examination into the affairs of Ormond Inns Ltd, which is in liquidation.
Mr Coffey told Ms Grainne Clohessy, for the liquidator, Mr Billy O'Riordan, that a Garda inspector visited the premises on a night in August 1997 and had closed the bar. The licence was withdrawn. On that night there was music, the bar was open and backgammon was being played, he said. The inspector had said he was not going to allow anything like that happen "in his patch".
Mr Coffey said he had later appealed to a Garda superintendent to have the decision reversed because of the 50 to 60 jobs in the hotel and the fact that it was being sold as a going concern. He even contacted the Taoiseach's office to see if he could intervene.
Mr Coffey acknowledged he did not have a tax clearance certificate, but denied he was using the Garda inspector's visit as a smokescreen for the absence of such a certificate. He said he had informed Anglo Irish Bank, which had a mortgage on the property, and it had put in a receiver. Interest in the hotel changed when people became aware of the bar closure and the appointment of the receiver, Mr Coffey said. Those interested in purchasing the property had "smelled blood" and knew it might sell at a very reasonable price.
Mr Coffey said that at the end of two years' trading in 1997 Ormond Inns owed some £450,000 to the Revenue Commissioners.
Fawnside Ltd, which leased the hotel for four years prior to 1995 and of which he was a director, had also left enormous liabilities to the Revenue, he said. When his company, Ormond Inns Ltd, purchased the hotel in 1995, it had taken over all the debts owed by Fawnside with the exception of money owed to the Revenue.
Mr Coffey told Mr Hill he did not think that was fradulent. He had taken advice on the matter and it was the only way forward.
The Master told Mr Coffey he might be required to attend for further examination.