Irish couple owe €800m to banks after property spending spree

Recent reports in the press have highlighted an eye watering debt level that would scare most Blue Chip businesses. According to reports, Brian and Mary Pat O’Donnell have claimed the Bank of Ireland is attempting to force sale on a prime London property asset without legal entitlement to do so.

Property developer Mr O’Donnell is one of Dublin’s leading commercial lawyers and ironically is on a list of some 60 or so legal advisers approved by Ireland’s National Asset Management Agency, charged with clearing the mountain of bad debt amassed by Ireland’s property developers during the better day’s pre credit crunch.

The O’Donnell’s racked up a colossal credit mountain buying up several London ‘trophy buildings’ such as Sanctuary Buildings, an office block mere metre’s from the Houses of Parliament, which the Bank of Ireland loaned them €27m towards the £170m purchase price.

In addition to this debt, Bank of Ireland has some other debts owed by the couple and grand scale of the O’Donnell’s debts has been laid bare in the court case brought by Bank of Ireland in relation to some €70m of debt it is trying to recover. This however is the tip of the ice berg as they owe more than €800m (£670m) to various banks around the world. Some of this €800m was built up with the purchase of Stockholm’s biggest office block, called the Fatburen for a wallet crunching €285m.

Despite the credit crunch firmly taking grip in late 2007 and early 2008, in April of 2008, quite astonishingly the O’Donnell’s were still able to access funds via their investment company Vico Capital and they managed to outbid a cash rich group from Dubai to pay a record $172.5m (£87m) for an office building in Washington DC, on the world famous Pennsylvania Avenue, just a few blocks from the White House.

Before the Washington acquisition, Vico Capital also acquired two buildings in London’s Canary Wharf, namely 17 Columbus Courtyard for £125m and 15 Westferry Circus for £140m. The first building is home to Credit Suisse and the second to Morgan Stanley. Vico Capital has only just refinanced (today 25th Jan) a £107 million loan on 17 Columbus Courtyard in Canary Wharf, which provides 200,000sq ft of office space, let to Credit Suisse until 2024. The refinance deal refinanced an existing loan with Morgan Stanley and is reported to have been done by London-based Duet Private Equity, MetLife and another ‘unnamed’ partner.

While many other middle-class professionals have in recent year acquired a few buy-to-lets, this O’Donnell’s became major international property players and had amassed an international property portfolio of more than €1.1bn (£921m) with an annual rent roll of some €150m (£125m).

Their Bank of Ireland court case is the latest in a series of court actions being instigated against property developers now bearing the full force of Ireland’s financial collapse.

The O’Donnell’s are listed as the 178th richest in Ireland and the scale of their debt woes is reflective of the entire Irish property market as much of the country is plunged further into negative equity against a backdrop of funders leaving the market.

Corporate Credit Debt Recovery provides services such as debtor tracing, ongoing business reports, commercial debt collection and debt recovery to a range of UK and EuroZone clients ranging from small to medium enterprises to large scale financial instutions.

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