A row between a well-known Co Galway-based businessman and Ulster Bank may put ‘jobs at risk’, the High Court was told this week.
Former Entrepreneur of the Year John Flaherty has brought proceedings against the Bank who he claims has wrongly put a charge on four houses which he says one of his firms needs to sell to complete the purchase of other lands.
BY AODHAN O FAOLAIN
Mr Flaherty is president and CEO of the C&F Group, headquartered at Athenry, and employs 400 people locally and hundreds more worldwide. The group provides manufacturing services to the IT, motor and refrigeration industries and makes wind turbines also has facilities in China, the US, Germany and the UK.
He is seeking a High Court injunction compelling Ulster Bank to remove a charge over property located at Woodfield, Tuam.
Mr Flaherty of Casla, Athenry, says the houses are not subject to a charge, having paid some €2.4m for the Tuam site more than a decade ago.
He said he serviced sites on the land which were sold on to various builders. He also constructed a number of houses on the land for his own use.
Due to the recession he was unable to sell the last four remaining houses on the site. Last October he secured buyers for the properties, but discovered that Ulster Bank has a put charge over the houses.
Mr Flaherty claims the bank does not hold any charge over the houses, and through his solicitor Owen Swaine wrote to the bank requesting it to vacate the charge.
While the Bank said it would investigate the matter, it has not removed the charge. Mr Flaherty says there is an urgency to the matter as he needs the proceeds from the sale of the houses to complete the purchase of 70 acres of land at another location.
The matter was mentioned before Mr Justice Gilligan at the High Court who heard that, unknown to Mr Flaherty, the lands at the centre of the dispute have been put up as security for borrowings made by a third party, who sold the site to Mr Flaherty .
Michael O’Connor BL, for Mr Flaherty, said his client purchased the Tuam lands from a third party for a sum of €2.4m. The land was then developed as housing before being sold off.
Counsel said it was then agreed the title of the lands in Tuam would remain in the name of the third party. Mr Flaherty was the beneficial owner of the land, counsel said.
Counsel said his client fears if he cannot sell the houses in Tuam the other deal cannot be closed – and that deal must be completed within the coming weeks.
Any failure to complete that deal would leave Mr Flaherty open to other litigation and he will lose a deposit he has already paid, counsel said.
If his client was to lose out counsel said a threat to the employment Mr Falherty provides cannot be ruled out. “Jobs could be put at risk,” counsel told the court. Counsel added Mr Flaherty believes the charge asserted by Ulster Bank is ‘a mistake’.
Stephen Byrne BL, for Ulster Bank, said the businessman’s application for an injunction could not go ahead as it was mandatory in nature. Counsel asked the court for an adjournment to allow it respond to Mr Flaherty’s claims.
Counsel added his instructions from the Bank were the houses in Tuam were put up as security in 2014 by the third party from whom the lands were acquired from.
Counsel said the bank sought additional security from the third party when that person sought to refinance existing borrowings with the bank.
In reply, Mr O’Connor said that was ‘news to us’. Mr O’Connor also told the court his side would consider adding the third party to the proceedings.
The Judge agreed to adjourn the matter to a date in February to allow a number of matters in relation to the dispute, including issues and documents concern the sale of the land in Tuam, be clarified.