Inexperienced Shopkeeper loaned €32 million

Fizman · 24-01-2011 08:04PM #1

http://www.irishtimes.com/newspaper/breaking/2011/0124/breaking59.html

A man being pursued over an unpaid €31.8 million loan for a shopping centre in Co Monaghan has claimed he was a shopkeeper who was given the loan by Zurich Bank despite never having previously engaged in any developments.

Jim McConnon, Main Street, Castleblayney, is seeking to defend the bank’s application for €31.8 million summary judgment against him on grounds the case raised issues as to whether he should be treated as a consumer within the meaning of the Consumer Credit Act, his counsel Ross Maguire SC said today.

Mr Justice Peter Kelly observed Mr McConnon borrowed some €32 million to build a shopping centre and queried how this raised issues under the Consumer Credit Act.

Mr Maguire said Mr McConnon was a shopkeeper who had never previously engaged in development “of any shape or size” and there were issues as to how it came about the bank had approached him, not vice versa. One of the largest estate agents in the world had also provided valuations beyond what would be reasonably expected, he added.

Mr Justice Kelly said he would give Mr McConnon an opportunity to put on affidavit the basis for any defence that might be advanced to the bank’s claim and he adjourned the case to next month.

The judge had earlier transferred the case to the Commercial Court list after rejecting arguments of delay on the part of the bank in bringing the proceedings.

The proceedings arose from a loan advanced to Mr McConnon in June 2007 for a shopping centre at Castleblayney and to refinance loans held by Mr McConnon with another institution which were secured against lands in Castleblayney, including lands on which the shopping centre was ultimately built.

The loan was due to be repaid by May 2009. While the shopping centre was built, it became apparent in 2009 that Mr McConnon could not get tenants for it and had repayment difficulties, counsel for the bank said. While the shopping centre had some tenants, it was not full, the court heard.

The bank gave Mr McConnon an opportunity to see if he could restructure his borrowings and advance a business plan but a plan submitted in June 2010 was rejected, counsel said. A formal demand for repayment of the €32 million loan was issued in mid-October 2010 and a receiver was appointed over the property on October 26th last.

Mr Maguire said it was apparent from May 2009 the position was “hopeless” and no restructuring could possibly repay the level of debt.

One of the more outrageous stories I've heard. It's almost humourous at this stage to look back at what was going on. What's the bet the bloke who authorised the loan is still in a job.

easyeason3 · 24-01-2011 08:21PM

So the shopkeeper gets a loan from the bank for 32 million to build a shopping centre. It doesn't work out because he can't get tenants to fill the units. So he goes to court & plays the fool about not understanding the contract he entered with the bank.
Is that right?

Dionysus · 24-01-2011 08:28PM

easyeason3 wrote: »

So the shopkeeper gets a loan from the bank for 32 million to build a shopping centre. It doesn't work out because he can't get tenants to fill the units. So he goes to court & plays the fool about not understanding the contract he entered with the bank.
Is that right?

Almost; in this brave new capitalist world you're forgetting the part where the fantastically professional bank which gave this massive loan to a virtual nobody will probably have its gambling losses paid for by taxpayers who had absolutely nothing to do with this private business transaction.

Assuming the bank is Irish and the taxpayers in question are Irish.

fontanalis · 24-01-2011 08:30PM

easyeason3 wrote: »

So the shopkeeper gets a loan from the bank for 32 million to build a shopping centre. It doesn't work out because he can't get tenants to fill the units. So he goes to court & plays the fool about not understanding the contract he entered with the bank.
Is that right?

Yes, it was at the time when people would have bought magic beans.

red menace · 24-01-2011 08:30PM

Fizman wrote: »

http://www.irishtimes.com/newspaper/breaking/2011/0124/breaking59.html

One of the more outrageous stories I've heard. It's almost humourous at this stage to look back at what was going on. What's the bet the bloke who authorised the loan is still in a job.

He went into it with his eyes open, the writing was on the wall in 07 that the good times were gone.
He gambled and lost

fontanalis · 24-01-2011 08:32PM

red menace wrote: »

He went into it with his eyes open, the writing was on the wall in 07 that the good times were gone.
He gambled and lost

No he wa ssmart and ballsy and invested in bricks and mortar which never lsoe value, Ireland is different. The poor champion of industry/Atlas was screwed over!

pandora512 · 24-01-2011 09:33PM

I thought Swiss Bankers were supposed to know what they were doing!!!!! Their credit committee must have been non existent or out to lunch - first Stokes Residence Club :mad:.... then Dalkey site with Alan Hynes and the 2 little old ladies :eek:now the shopkeeper in Castleblaney!!!!!!!!

They came - they lost - and now I bet they're trying to get back to Switzerland asap!!!!!!!!! Although are they still 'saving' Quinn Insurance!!!!!???? With this kind of expertise how can they fail!!!!!:)

ChineseTego · 24-01-2011 11:13PM

You would just have to ask what was going on here as there were obviously a lot of people who made very big mistakes. From what I saw on the news you wouldn't get a centre the size of this in Las Vegas never mind a one horse town like castleblaney!

ejmaztec · 24-01-2011 11:19PM

Jim McConnon

I'm surprised the bank didn't spot that.

Pete M. · 24-01-2011 11:28PM

fontanalis wrote: »

Yes, it was at the time when people would have bought magic beans.

Do you know anywhere where you can still get some?

They'd be fierce handy around now.

Monty Burnz · 24-01-2011 11:45PM

Fizman wrote: »

http://www.irishtimes.com/newspaper/breaking/2011/0124/breaking59.html

One of the more outrageous stories I've heard. It's almost humourous at this stage to look back at what was going on. What's the bet the bloke who authorised the loan is still in a job.

Or possibly he's a chancer who borrowed a fortune and blew it. You can bet if he made a killing he wouldn't be happy to share it, but his losses he'll happily spread around.

The funny bit here is he's trying to be treated like a small personal account customer who has some issue with payment protection insurance or some such, rather than as a developer who borrowed over 30 million.:eek:

ChineseTego · 24-01-2011 11:49PM

You have to remember one crucial point regarding this case. When the bank advance the money in mid 2007 the boom was already stalling so there was enough information around to call a halt to the whole crazy idea. The lads in Zurick must have never visited the town/Site either that or they mistakenly thought it was being built in Chicago. Its also worth noting that its a foreign Bank that stumped up the cash - perhaps the Irish Banks were smater than we thought?

Daroxtar · 24-01-2011 11:54PM

A barrister and a lawyer pretending to be accountants were given €85 billion

Fizman · 24-01-2011 11:56PM

ChineseTego wrote: »

You have to remember one crucial point regarding this case. When the bank advance the money in mid 2007 the boom was already stalling so there was enough information around to call a halt to the whole crazy idea. The lads in Zurick must have never visited the town/Site either that or they mistakenly thought it was being built in Chicago. Its also worth noting that its a foreign Bank that stumped up the cash - perhaps the Irish Banks were smater than we thought?

Lets not be silly.

Neadine · 24-01-2011 11:58PM

Throwing money around like this, with little regard for the potential success of business ventures, or even people's knowledge and experience... it's a wonder the country has actually survived as long as it has. And I use the word 'survive' very loosely.

big stuff · 25-01-2011 12:12AM

boatbuilder wrote: »

As far as I know this guy inherited the family shop from his father and I don't think he really had much business talent himself. Its another instance of the banks giving money out to anyone who sweet-talked them. I'm sure this same story has happened over and over again throughout the country. Its amazing over the past few weeks how many large businesses in County Monaghan have gone to the wall in a spectacular way with tens of millions of debt.

folks this guy did not inherit the family business he is originally from another part of Monaghan. He took over a failing family business in Castlebleyney in fairness he turned it around and bought the business.He built a big extension to the shop around 10 years ago.
As regards for his claim to be a simple shop keeper. If one were to check out the the property that was bought in the castleblayney area in the last 8 or 9 years you would discover a certain simple shop keepers name.
There are also close family ties with a south armagh entrepreneur.

ChineseTego · 25-01-2011 12:18AM

Connections to a "A certain south Armagh entrepeneur" - its a wonder he had to go to a Bank in the first place for the money. You wont be able to get finance in Blayney for a Henhouse for the next 20 years!!

Forest Master · 25-01-2011 12:20AM

Neadine wrote: »

Throwing money around like this, with little regard for the potential success of business ventures, or even people's knowledge and experience... it's a wonder the country has actually survived as long as it has. And I use the word 'survive' very loosely.

The bank wasn't Irish. Read the post next time.

Smcgie · 25-01-2011 02:20AM

Serious hearsay on this thread:

He gambled and lost

He didn't gamble, he tried to build up the infrastructure of a small rural town albeit unsuccessfully. What about all the people that this man has employed locally over the last few years?

Or possibly he's a chancer who borrowed a fortune and blew it

More horse shyte.

As far as I know this guy inherited the family shop from his father

Incorrect, he was the manager of the shop when the previous owners (Flemmings) decided to sell the shop on and he purchased it.

There are also close family ties with a south armagh entrepreneur.

I must say this is the typical attitude of most Monaghan people. Total Begrudging of anyone that tries to be successful; then when they fall - kick them in the bollox. This is total nonsense and you obviously live quite local to hear this "Gossip"

Although I no way no the man personally. I do know of people that have worked in both the Supervalu and the Shopping centre complex for Jim and they have the highest regards for him. It amazes me the local "1 post Boardsies" that have registered here just to add these insults and digs like "Connection to south Armagh". Its only when you see a thread like this you realise how much crap is posted on Internet forums. If you were to believe everything you heard you'd eat everything you seen.

The man tried to build up the town much like others did successfully over the years, and of course it only matters now to the gossipers, begrudgers & pessimists who are delighted. Shame

JustAddWater · 25-01-2011 02:29AM

what's the weather like in monaghan Jim?

Smcgie wrote: »

Serious hearsay on this thread:

He didn't gamble, he tried to build up the infrastructure of a small rural town albeit unsuccessfully. What about all the people that this man has employed locally over the last few years?

More horse shyte.

Incorrect, he was the manager of the shop when the previous owners (Flemmings) decided to sell the shop on and he purchased it.

I must say this is the typical attitude of most Monaghan people. Total Begrudging of anyone that tries to be successful; then when they fall - kick them in the bollox. This is total nonsense and you obviously live quite local to hear this "Gossip"

Although I no way no the man personally. I do know of people that have worked in both the Supervalu and the Shopping centre complex for Jim and they have the highest regards for him. It amazes me the local "1 post Boardsies" that have registered here just to add these insults and digs like "Connection to south Armagh". Its only when you see a thread like this you realise how much crap is posted on Internet forums. If you were to believe everything you heard you'd eat everything you seen.

The man tried to build up the town much like others did successfully over the years, and of course it only matters now to the gossipers, begrudgers & pessimists who are delighted. Shame

Smcgie · 25-01-2011 02:33AM

JustAddWater wrote: »

what's the weather like in monaghan Jim?

Knew that one way coming, Yea its Me Jim Ive registered just for that post.:rolleyes:

msg11 · 25-01-2011 03:35AM

We care cause we have too foot the bill for his mistake. Fair play to him employing people and trying to make the town better for people. Now there is the slight problem of 32 Million the tax payer has too foot. Of course people are going to **** stir about him there angry.

hinault · 25-01-2011 03:38AM

boatbuilder wrote: »

Yep, big-chested arrogant fellas when things are going well for them, but poor little helpless puppy dogs when things go wrong.

True.

And lacking the character to take personal responsibility for his actions.

Jesus Wept · 25-01-2011 03:43AM

lolbank

ChineseTego · 25-01-2011 09:06AM

From the pictures on the news last night the place looked like it is still unfinished so you have to assume there are a lot of contractors, most probably local, who have been stung by this fella.

By the way spare me the crap about a businessman trying to build up the towns infrastructure.

The only reason any businessman enters a venture like this is for thier own self enrichment (which they are perfectly entitled to do). Greed got the better of him and he's now going to pay the price!

thirtythirty · 25-01-2011 09:17AM

Dionysus wrote: »

Almost; in this brave new capitalist world you're forgetting the part where the fantastically professional bank which gave this massive loan to a virtual nobody will probably have its gambling losses paid for by taxpayers who had absolutely nothing to do with this private business transaction.

Assuming the bank is Irish and the taxpayers in question are Irish.

Actually it was Zurich Bank which is a highly respected entity. You think they just hand those kind of loans out? Sure the post-review processes were obviously broken, but that guy looking for a loan clearly lied through his teeth with projections, collateral etc.

The shopkeepr should be locked up. The amount of people escaping blame by focusing light on a system well all know by now was broken is really starting to piss me off now.

That shopkeeper is a thief, and no doubt will continue his life as usual with no reprecussions of what he did (deliberately or not). It's a disgrace.

seamus · 25-01-2011 09:25AM

spottyelephant wrote: »

The shopkeepr should be locked up.

For a failed business venture? Nice.

We seem to have this idea that banks bear no responsibility in their side of a loan transaction. A loan is a joint gamble by both the borrower and lender, whether it's €3k for a car or €32 million for a shopping centre.

In all cases, the bank should look at the proposal and weigh up the risks. The problem with our banking system is that all the risk is loaded onto the borrower, who is legally indebted to the lender, even if the proposal the loan is based on has failed.

In all cases the courts should treat banks as conditional investors and only issue judgements for amounts where the borrower has committed fraud or has been shown to be reckless with the investment. If it's simply a matter of business failure or bad luck, the bank should be told to go jump for it.

If it's a personal loan to consumer which has gone bad, you give the bank the keys to whatever assets are involved and let them walk away with it.

Maybe then banks will consider what they're doing when handing out money.

Monty Burnz · 25-01-2011 09:52AM

seamus wrote: »

Maybe then banks will consider what they're doing when handing out money.

That will do wonders for killing off those nasty entrepreneurs too - make it too risky for banks to lend. Sure we don't really need an economy. :rolleyes:

seamus · 25-01-2011 09:54AM

Monty Burnz wrote: »

That will do wonders for killing off those nasty entrepreneurs too - make it too risky for banks to lend. Sure we don't really need an economy. :rolleyes:

I don't see how. All it will do is make banks consider loan applications properly instead of just handing over money to the manager's golfing buddies. As it stands any entrepreneur who goes belly-up is generally written off when the limited company goes tits up. Just simplify this process by avoiding the courts and banks will lend more realistically.

thirtythirty · 25-01-2011 09:56AM

seamus wrote: »

For a failed business venture? Nice.

We seem to have this idea that banks bear no responsibility in their side of a loan transaction. A loan is a joint gamble by both the borrower and lender, whether it's €3k for a car or €32 million for a shopping centre.

In all cases, the bank should look at the proposal and weigh up the risks. The problem with our banking system is that all the risk is loaded onto the borrower, who is legally indebted to the lender, even if the proposal the loan is based on has failed.

In all cases the courts should treat banks as conditional investors and only issue judgements for amounts where the borrower has committed fraud or has been shown to be reckless with the investment. If it's simply a matter of business failure or bad luck, the bank should be told to go jump for it.

If it's a personal loan to consumer which has gone bad, you give the bank the keys to whatever assets are involved and let them walk away with it.

Maybe then banks will consider what they're doing when handing out money.

I would like to see that shopkeeper's application. I'd put money on there being wild valuations and ambiguous statements throughout any proposals, all of which he would have been aware of and was trying to push the boat out on.

We "don't seem to have this idea that banks bear no responsibility" - everyone in the country knows they were operating abysmally, but because of that people like you come along and give all borrowers a pass.

Yes, the banks are hugely at fault. We know this,and they should be dealt with. In the meantime, all the "oh me too! The big bad banks gave me too much money" types should be throroughly investigated and have appropriate repercussions.

orourkeda · 25-01-2011 10:03AM

Fizman wrote: »

http://www.irishtimes.com/newspaper/breaking/2011/0124/breaking59.html

One of the more outrageous stories I've heard. It's almost humourous at this stage to look back at what was going on. What's the bet the bloke who authorised the loan is still in a job.

Surely a loan of that magnitude would go to the top or fairly close to the top

Inexperienced Shopkeeper loaned €32 million

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