A businessman has secured a temporary High Court injunction preventing a receiver from selling or interfering with six residential properties located in Galway and Limerick.
The order was secured following an application before the High Court by lawyers acting for Martin Brennan against receiver Mr David O’Connor, a corporate recovery specialist and partner with BDO Ireland.
The court heard that earlier this year Mr O’Connor was appointed receiver by a financial fund arising out of an alleged failure to repay loans of €2 million advanced to the plaintiff in 2006 by EBS.
Mr Brennan from Monivea Road, Ballybrit in Galway disputes the validity of the receiver’s appointment and has brought separate proceedings arising out of the handling and the provisions of security of the loan in question.
The injunction prevents Mr O’Connor from selling, preparing for sale or interfering with the six properties owned by Mr Brennan.
The injunction was granted, on an ex-parte basis, by Mr Justice Kerida Naidoo during Tuesday vacation sitting of the High Court.
The Judge said that he was granting the injunction mainly due to his concern that the defendant receiver had not replied to correspondence sent from the plaintiff’s solicitor.
The injunction is to remain in place until the matter returns before the High Court next week.
Seeking the injunction Venetia Taylor Bl, instructed by solicitor Donnacha Anhold for Mr Brennan said that case had its origin arising out of a €2 million loan taken out by Mr Brennan in 2006 with EBS to allow him participate in a tax investment scheme.
The scheme involved him purchasing five cottages, for which he would receive rent for, at the Montenotte Hotel in Cork counsel said.
EBS was given security over those properties, counsel said.
Under that agreement he claims that the promoters agreed to buy back the units after ten years.
Counsel said that the promoters failed to buy the units back, which is something that Mr Brennan is taking a separate legal action over where he seeks to have the contract regarding those properties specifically performed by the three parties, he claims promoted the scheme.
Counsel said that in 2011 EBS put pressure on him to give it additional security on the 2006 loan.
Counsel said that at the time her client was in the dark as to why he was being hounded by EBS into giving it the extra security over a further four properties owned by him in Galway city.
Counsel said that what her client found out subsequently was that EBS carried out an independent assessment of the title in respect of the cottages and concealed the fact that the security he had over the cottages was commercially worthless.
Mr Brennan only holds the 25-year lease over those properties as the freehold interest over the cottages which he claims should have been given to him under the terms of the scheme, was never transferred to the plaintiff.
EBS counsel said did not inform Mr Brennan to get independent legal advice regarding the five cottages.
The loans taken out by Mr Brennan were subsequently acquired by Everyday Finance DAC, which he is taking legal proceedings against, counsel said.
May be sold
Last May, Everyday appointed a receiver over five Galway properties and one in Limerick owned by Mr Brennan, counsel said.
The tenants at those properties have been asked to pay rent to the receiver.
Mr Brennan now fears that the properties may be sold.
Counsel said that Mr Brennan challenges the validity of the receiver’s appointment.
However, the receiver has not provided their client with evidence of his appointment lawyers.
No reply has been sent by the receiver to correspondence sent by Mr Brennan’s solicitor counsel added.
In the circumstances where Mr Brennan, who is aged in his seventies, fears that the properties will be gone before he gets a chance to challenge the receivers appointment, counsel said
As a result, her client was seeking an injunction against Mr O’Connor.
Counsel said her client had made out a fair issue to be tried, that the balance of justice favoured the granting of the injunction, and that damages would not be an adequate remedy.