BANK of Ireland reached a deal with Brian and Mary Patricia O’Donnell

 The arrangement, which collapsed last week when Morgan Stanley sent in receivers, stands in sharp contrast to the bank’s aggressive public stance. Bank of Ireland is currently pursuing the O’Donnells through the courts for €75m amid allegations of fraud.

The Irish Independent has learned that as recently as three weeks ago, the bank and the O’Donnell family were in agreement that the proceeds from the sale of the company that owns 15 Westferry Circus would be handed to the bank. In return, the bank had agreed to release a charge it holds over the office block in London’s Canary Wharf, facilitating the sale.

The bank would have been paid any money the O’Donnells made from the sale, plus a further share of the tax savings achieved for other lenders by avoiding a receivership.

On July 25, lawyers for Bank of Ireland told the High Court that Brian O’Donnell, his wife and two adult sons had put together a “blatant” scheme to put €255m worth of assets beyond the bank’s reach. The bank claimed fraud by Mr O’Donnell and his wife Mary Patricia and their sons, Bruce and Blake.

The Irish Independent understands that even as the claim was being made public in court, the bank was actively talking to members of the family to make progress on the sale of the office block at 15 Westferry Circus, in London’s Canary Wharf — one of the assets under discussion in the courts.

Agreement

Both sides were in agreement that the proceeds of a sale of shares in a a company called Hibernia would go to help pay off Brian and Mary Patricia O’Donnell’s debt to the bank.

That was despite the fact that in court, Mr O’ Donnell had said Hibernia was owned by his son, Blake O’Donnell, through a trust and not owned by the couple. The trust would put the assets beyond the reach of the lender.

The hoped-for sale collapsed because a second lender, Morgan Stanley, opted to send in receivers instead. The US bank had a more senior charge over the property thanks to a £131m property loan that fell due back in April. Receivers were appointed on August 7, but it’s understood a deal had been close before Morgan Stanley made its move.

Bank of Ireland declined to comment on the case.

Morgan Stanley appointed receivers Julian Clarke and Annabel Sutherland of Savills to take control of 15 Westferry. The US bank had arranged the loans to buy the office block in 2005, and is also the main tenant occupying the offices.

That 2005 deal made headlines around the world because the O’Donnells were the first private individuals to own a building in Canary Wharf.

Source: Irish Independent