Blayney trader must repay €32 million in loans for shopping centre development, court rules

11 March 2011 No Comments by The Northern Standard

A Castleblayney trader was informed in the Commercial Court in Dublin on Friday that he must repay a €32 million loan he obtained from a bank to fund a shopping centre development in the Mid-Monaghan town.
Forty-year-old Jim McConnon of Main Street, Castleblayney was told by Mr Justice George Bermingham that Zurich Bank was entitled to recover the €32 million in unpaid loans which it had made to him in 2007.
The Judge ruled that the ‘Blayney man had failed to make any arguable defence to the bank’s claim that the case should go to a full hearing.
Mr McConnon had previously told the court that he could not afford to repay the loans. He argued that he should be absolved from his indebtedness as Zurich Bank had failed to investigate valuations carried out by estate agents CBRE.
The court was told that the shopping centre development, which has never been fully occupied, was now valued at between €1million-€2 million.
Delivering his ruling, Mr Justice Bermingham said that, viewed today, the decision to advance such huge loans in 2006 seemed extraordinary, and even bizarre.
The speed with which the bank indicated to Mr McConnon that it would give him the money, within 24 hours of first meeting him in April of 2007, seemed quite remarkable, the judge stated.
However the judge said that this was not a question of a bank forcing funds on a reluctant but gullible borrower. He pointed out that Mr McConnon had embarked upon the development before Zurich Bank entered the scene, and had already spent €10 million which had been advanced to him by Allied Irish Banks on acquiring sites.
Mr Justice Bermingham stated the fact that AIB refused in late 2006 to provide any further funding on the basis that the project was unviable, and that other banks approached by Mr McConnon also seemed disinterested, must have indicated to all concerned that this was not a project free of risk.
However, Mr McConnon had decided to proceed. He borrowed the money from Zurich Bank and there was no arguable basis for suggesting that he could be absolved from liability to replay.
Mr Justice Bermingham said this was one of the rare cases where the bank was entitled to summary judgment.
The judge disagreed with the argument presented by the New Beginning group of lawyers who appeared for Mr McConnon that he had a defence on several grounds to the bank’s claim.

Full story in The Northern Standard

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