The High Court has entered summary judgment against six investors over sums due under a €180 million loan used to buy the Bank of Ireland headquarters on Baggot Street in Dublin.
Bank of Scotland plc advanced the loan under an agreement dated 28 August 2006. The property was acquired and, through corporate vehicles, leased back to Bank of Ireland. The borrowing was structured as a partial-recourse loan. Although €180 million was advanced, personal recourse against the borrowers for principal was limited in aggregate to €25 million, together with their shares of interest due on the full loan.
Mr Justice Charleton held that the bank had properly proved the loan, demands and defaults. Judgment was entered for €7,929,447 against Patrick Shovlin; €3,964,723 each against Patrick FitzPatrick and Anthony FitzPatrick; €1,523,268 against Ronan O'Caoimh; €1,606,794 against Patrick Mooney; and €517,412 against Peter Lavelle.
For Shovlin and the two FitzPatricks, the court also dealt with an error in the wording of the summary summons concerning continuing interest. The judge permitted an amendment, holding that the court's general power to amend pleadings could be used to clarify the claim and determine the real issue between the parties.
Mooney argued that the bank could not recover until the Baggot Street property had been sold or valued below the recourse threshold. The court rejected that interpretation. It held that the loan agreement expressly made each borrower separately liable for his share of interest and recourse principal, regardless of whether the secured property had first been sold.
The court granted Lavelle a three-month stay on enforcement and O'Caoimh a five-month stay. Both sides were given liberty to apply regarding those stays.
No order was made against defendants not specifically dealt with in the judgment.