This week a hearing into an ambitious but failed plan hatched by Irish investors to buy, refurbish and sell two New York skyscraper hotels will be held in Commercial Court in Dublin.
The hearing will be told how a $194 million deal between Anglo Irish Bank and several wealthy Irish investors eventually unraveled.
Gerry McCaughey, the multimillionaire founder of Century Homes, is taking the case, which will begin today and is scheduled to run for up to six weeks.
McCaughey is one of 50 investors who fronted $1 million each into the Anglo Irish New York Hotel Fund, which bought the two premiere New York buildings the Beekman Tower Hotel and Eastgate Tower Hotel in 2006.
But four years later the planned refurbishments have not taken place and disputes have erupted between Anglo, the US-based promoter of the big figure deal, and 22 of the investors led by McCaughey.
The Monaghan businessman is alleging that Anglo perpetrated a fraud on the investors, and with the other investors he is seeking up to $45 million from Anglo, including the return of their investment and damages for "fraudulent or reckless concealment and misrepresentation."
If McCaughey’s exploratory case is successful, it will permit other investors to go ahead with their own actions.
However an Anglo spokesman said the allegations were 'absolutely without foundation," and would be defended ‘"extremely vigorously" by the now nationalised bank.
McCaughey’s senior counsel, Martin Hayden, is expected to lay out four elements to the businessman’s allegations of fraud against Anglo today: the increase in the cost of the renovations; the issues that arose over the zoning of the hotels; the issues that arose over sitting tenants in the hotels; and Anglo’s interest rate strategy on the loans.
Moving to Ireland
After living in Ireland for almost one year, this is what I’ve learned