Galway businessman blocks sale of six residential properties
A businessman has won a temporary High Court injunction preventing a receiver from selling or interfering with six residential properties in Galway and Limerick.
The order was obtained following an application to the High Court by solicitors acting for Martin Brennan against receiver Mr David O’Connor, a corporate recovery specialist and partner at BDO Ireland.
The court heard that earlier this year Mr O’Connor was appointed receiver by a financial fund following an alleged default in repayment of €2million loans advanced to the plaintiff in 2006 by EBS.
Mr Brennan of Monivea Road, Ballybrit in Galway challenges the validity of the receiver’s appointment and has brought separate proceedings arising out of the management and security arrangements of the loan in question.
The injunction prevents Mr. O’Connor from selling, preparing to sell or interfering with the six properties owned by Mr. Brennan.
The injunction was granted, on an ex parte basis, by Justice Kerida Naidoo during Tuesday’s recess session of the High Court.
The judge said he was granting the injunction primarily because he was concerned that the defendant receiver had not responded to correspondence sent by the plaintiff’s attorney.
The injunction is to remain in place until the case returns to the High Court next week.
Seeking the injunction Venetia Taylor Bl, mandated by lawyer Donnacha Anhold for Mr. Brennan, said that this case arose from a loan of 2 million euros taken out by Mr. Brennan in 2006 from EBS to enable him to participate in a tax investment scheme.
The scheme involved him buying five cottages, for which he would receive rent, at the Montenotte Hotel in Cork, the solicitor said.
EBS obtained security for these properties, the attorney said.
Under the terms of this agreement, he claims that the developers have agreed to buy back the units after ten years.
The lawyer said the developers had not bought out the units, which Mr. Brennan is bringing a separate lawsuit to find out where he is seeking to enforce the contract for these properties specifically by the three parties he says has promoted the program.
The lawyer said that in 2011 EBS pressured him to give him additional security on the 2006 loan.
The solicitor said at the time his client did not know why he was being harassed by EBS to give him the extra security on four other properties he owned in Galway city.
The solicitor said what his client subsequently discovered was that EBS had carried out an independent valuation of the title to the chalets and concealed the fact that the security he held on the chalets n had no commercial value.
Mr. Brennan only holds the 25-year lease on these properties because the freehold interest in the cottages which he claims should have been given to him under the plan, was never transferred to the plaintiff.
EBS’ lawyer said he did not advise Mr Brennan to seek independent legal advice regarding the five cottages.
The loans Mr Brennan took out were later acquired by Everyday Finance DAC, against whom he is taking legal action, his lawyer said.
Can be sold
Last May, Everyday appointed a receiver for five properties in Galway and one in Limerick owned by Mr Brennan, his lawyer said.
Tenants of these properties were asked to pay rent to the receiver.
Mr Brennan now fears the properties will be sold.
The attorney said Mr. Brennan disputes the validity of the receiver’s appointment.
However, the receiver did not provide their client with proof of his appointment of attorneys.
No response was sent by the Receiver to correspondence sent by Mr. Brennan’s attorney added.
In the circumstances Mr Brennan, in his seventies, fears the properties will disappear before he has a chance to challenge the appointment of receivers, the lawyer said.
Accordingly, his client sought an injunction against Mr. O’Connor.
The attorney said his client had established a fair question to be tried, that the balance of justice was in favor of granting the injunction, and that damages would not be an adequate remedy.