Swiss bank seeking recovery of €31.8 million loan from Castleblayney businessman

28 January 2011 No Comments by The Northern Standard

A case in which a Swiss bank is seeking the recovery of a €31.8 million loan advanced to a Castleblayey businessman for the construction of a shopping complex in the town came before a sitting of the Commercial Court in Dublin this week.
Zurich Bank has applied for a summary judgment against Jim McConnon of Main Street, Castleblayney.
Mr Justice Peter Kelly said he would give Mr McConnon an opportunity to put on affidavit the basis for any defence that might be advanced to the bank’s claim and he adjourned the case to next month.
Mr McConnon’s counsel Ross Maguire told the court that his client was seeking to defend the bank’s application against him on the grounds that the case raised issues as to whether he should be treated as a consumer within the meaning of the Consumer Credit Act.
Mr Maguire said Mr McConnon was a shopkeeper who had never previously engaged in development “of any shape or size” and there were issues as to how it came about that the bank had approached him, not vice-versa.
One of the largest estate agents in the world had also provided valuations beyond what would be reasonably expected, he added.
The court was told that Mr McConnon had no prior experience of engaging in developments of this nature.
The Main Street shopping centre was constructed but was not fully occupied by tenants, Mr Justice Kelly heard. It became apparent in 2009 that Mr McConnon could not get the number of tenants needed for the project and he consequently encountered repayment difficulties.
The court was informed that proceedings arose from a loan advanced to Mr McConnon in June 2007 for the shopping centre and to refinance loans held by him with another institution that were secured against lands in Castleblayney, including those on which the shopping centre was built. The loan was due to be repaid by May 2009.
The bank gave Mr McConnon an opportunity to see if he could restructure his borrowings and advance a business plan.
But a plan submitted in June 2010 was rejected and a formal demand for repayment of the €32m loan was issued in mid-October 2010, counsel for the bank said. A receiver was appointed in relation to the property on October 26.
Mr Maguire said it was apparent from May 2009 that the position was “hopeless” and no restructuring could possibly repay the level of debt.

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