A group of investors are to ask the High Court for an order allowing them to redeem their €832,000 loan on lands in Co Tipperary, over which Nama has appointed areceiver.
The investors’ — Joseph Hynes from Gortmore, Rosscahill, Galway, Sean Hynes of Forenaughts, Naas, Co Kildare, and Eugene Hyland, Castletroy, Co Limerick — claim that NAMA’s appointment of a receiver to sites at The Island in Clonmel, in March 2011, has blocked and frustrated their attempts to pay off the mortgages on the properties.
In proceedings against NAMA, IBRC (formerly Anglo), and receiver Eoin Ryan, Mr Justice Feeney yesterday granted the investors permission, on an ex-parte (one side only) basis, to apply next Monday for an order seeking a declaration that they have a right to redeem the mortgages.
Barrister Michael Vallely told the court yesterday that Joseph and Sean Hynes and Eugene Hyland, with the late John O’Dolan, acquired two sites at Avonmore and Cooney, both in The Island, Clonmel.
The investors secured the sites on foot of loans totalling IR£655,000 (€832,000) obtained from the then Anglo Irish Bank in 1999 and 2001.
As part of the deal, each of the investors took out life insurance policies for IR£1 million (€1,270,000) which were assigned to the bank as security over the properties.
They each made premium payments. Mr O’Dolan, based in Galway, who had taken out his life policy with Canada Life, died in February 2009. The other borrowers had continued to meet the loan payments up until May 2009 to allow time for Mr O’Dolan’s life policy to be cashed.
Mr Justice Kevin Feeney was told that in March 2010, the bank informed the three surviving members of the group that the amount paid out on Mr O’Dolan’s life policy came to €536,000 which was credited to the mortgages.
The investors were surprised when the payout from Canada Life was so low as they had expected a payout of the euro equivalent of IR£1m, which would have been enough to redeem the loans. The court heard that no explanation has been given to the three investors why the life insurance payment was so low. In March 2011, the bank informed them the loans had been acquired by NAMA.
Eoin Ryan, of Horwath Bastow Charleton chartered accountants, had been appointed statutory receiver on behalf of NAMA, which meant they could no longer deal with the sites.
The investors met with the bank and Mr Ryan. They told them they wished to redeem the loans and wanted to sell the two sites.
They also sought an explanation in relation to the low amount paid out on Mr O’Dolan’s policy, counsel said.
Following a meeting with the bank in August 2011, the investors claim they were assured they would be given an explanation for the substantial shortfall on the life policy.
Counsel added that documents explaining the insurance shortfall have not been furnished to his clients.
Mr Vallely added that the investors thought that NAMA and the receiver would put the proposed sale on hold.
However, the two sites appeared on the market for sale by the receiver in March 2012, and an offer has been made.
The court heard that as a result of the receiver’s appointment, the investors say their rights to redeem the loan had been blocked and frustrated, and commenced legal proceedings in order to prevent the sale of the properties.