One wonders whether forthcoming cases will create new precedents in Irish case law with regard to personal guarantees. Another case follows hot on the heels of the case involving Michael Daly in the High Court earlier this week where the judge, Mr Justice Peter Charleton ruled that Mr Daly who is being pursued by Anglo for €84.4m, had produced what the judge described as an “arguable defence” which was sufficient for Mr Daly to avoid a summary judgement and instead will now have a full hearing in May – the judge is reported to have stressed that his judgement was a reflection of the relatively low threshold required to avoid summary judgements and that his decision at this stage would not prejudice the outcome of the full hearing.
Yesterday, Mr Justice Peter Kelly was called on to decide in the case of the wife of a Kildare developer named Eugene O’Neill. Mr O’Neill is being pursued by Ulster Bank for in excess of €16m. The wife whose name is Deidre was defending a case in respect of personal guarantees apparently signed by her and is reported to have set out a defence which included her not understanding the significance of what she was signing and not receiving legal advice on the matter. The judge decided that Mrs O’Neill had put forward an “arguable defence” and consequently the case is now set for a full hearing. The judge also questioned why “anyone in their right mind” would sign personal guarantees for unlimited liabilities as apparently happened in the case of Mrs O’Neill. The case was reported by the Irish Independent.
As a separate matter NAMA has said that, in respect of the first tranche, it has paid the financial institutions nothing for personal guarantees, apparently much to the institutions’ ire. There is likely to be intense interest in the nature of personal guarantees in the coming months from a legal, financial and indeed social viewpoint.
UNLIKE your assertion that we will hear a lot about Business Plans…when we won’t…it is fair to say that we shall assuredly hear about personal guarantees as the collateral is packed up ready for NAMA.
Nothing like an order by the High Court eh???
You may or may not be right about developer business plans but today’s Sunday Tribune reports that “The few who have already done so [developers submitting business plans] have had them sent back, sources said, because the plans were based on unrealistic projections or long-term interest roll ups. “The article also claims that NAMA will only allow one further revision of developer business plans before taking control themselves, which could lead to foreclosure. The reason I think we will hear about developer business plans sooner rather than later is that I know some property funds and developers are circling certain putative NAMA assets – the money carousel still turns and there are developers and funds with cash to invest now – these people will not sit on their hands. Also if NAMA is considering disposing of property within weeks which I have seen claimed by interested parties then that surely will also elevate the visibility of the developer business plans. The Tribune article is here and has the sort of “sources” information that I was associating with Simon Carswell who has gone a little quiet on NAMA in recent times.
http://www.tribune.ie/business/article/2010/apr/25/anglo-faces-further-haircut-of-500m/