| Mr McConnon (40), Main Street, Castleblayney, is fighting against the Zurich Banks application for €32 million summary judgment against him on several grounds. This includes the bank’s alleged failure to properly analyse what he claims were “nonsensical” site valuations provided in 2007 to him and the bank by CBRE.
His decision to proceed with the development was based on the €30 million valuation and it was perfectly reasonable for him to assume Zurich and CBRE knew the property market, he said.
He claims that in April 2007 the bank had approached him without him asking them to. Mr McConnon also said that within 24 hours of meeting him for the first time,they gave him a term sheet for a €32 million loan on conditions ultimately contained in the bank’s formal loan offer issued in June 2007.
Zurich Bank loaned the money just months after Allied Irish Banks pulled out of funding the project on grounds it was not viable, the Commercial Court heard today.
In an affidavit, Mr McConnon said he was manager of the Supervalu store in Castleblayney at the age of 21 and bought that business in 1996 for IR£500,000 with a bank loan.
With loans from AIB, he bought a site behind his shop for €3.2 million in 2004 and an adjacent site for €3.3 million in 2005. The intention was to develop a shopping centre, and he was advised a €21 million investment, plus another €10 million to refinance the AIB loans, was required.
In late 2006, AIB decided the project was not viable and refused further funding, he said. He had no further success getting funding until Zurich approached him in April 2007.
The court heard the Zurich loan was due to be repaid by May 2009 but, while the shopping centre was built, Mr McConnon could not get enough tenants for it and encountered repayment difficulties.
The bank extended the loan for a period to see if Mr McConnon could come up with a repayment plan, however proposed payment plan by him in June 2010 were rejected. The bank appointed a receiver over the property last October. |
Thursday, 17 February 2011 19:59