Ten investors are being sued by a fund claiming they owe €2.4m on the 2009 refinancing of a Davy Stockbrokers-organised loan taken out towards the purchase of 11 tax designated apartments in Limerick.

Everyday Finance DAC, trading as Link Financial, is seeking judgment against the investors who availed of a tax incentive scheme to buy the apartments at Fisherman’s Quay, Grove Island, in 2006.

The investors were introduced to the investment in 2005 by Davy and came together under the Grove Island Co-ownership group.

The case was admitted yesterday by Mr Justice Denis McDonald on the application of the investors and on consent between the parties.

Everyday/Link claims that in 2009, Ulster Bank advanced €3.2m to the investors to refinance a 2006 loan to buy the apartments.

Everyday says the interest-only loan was repayable on demand and if demand was not made, by February 2016.

As part of the facility, the investors were to exercise a “put and call option” (which could result in the sale of the property) between themselves and the promoters of the development, Martin Tynan and Brian Dobson, in order to fund the repayment of the loan by 2016.

Everyday/Link claims the liability of the investors would be joint and several and security would include first legal charge over certain units in the development, the put and call option and the personal guarantees of the promoters.

David Goddard of Davy Stockbrokers, was appointed under the co-ownership agreement to act as the investors’ agent with power of attorney.

In 2013, Ulster Bank appointed receivers over the properties and in 2015 the bank sold its interest in the loan to the Cerberus Capital firm, Promontoria. The properties were sold in 2018 and Promontoria then sold its interest in the security over the loan to Everyday/Link.

Following a failure to meet a demand for repayment, Everyday/Link brought High Court proceedings seeking judgment on the outstanding amount on the loan for €2.4m.

Seeking entry of the case to the fast track commercial list, Mr Goddard, of Davy, said the investors did not take on any personal risk or liability relating to the loan debt.

When the loan was first taken out in 2006, recourse, or liability to repay, against the investors was expressly limited to their interest in the property, he said.

Mr Goddard claims the essential premise of Everyday/Link’s case is that 2009 refinancing meant a fundamental change whereby there would be full recourse against the investors.

He said this is incorrect and it is clear from the 2009 facility letter that there was no change to the limited recourse aspect.

Mr Justice McDonald approved directions for how the case will proceed and said it could come back in April.

The investors/defendants are: Sheila Cooney, of St Kevin’s Park, Darty, Michael Maughan, of Ailesbury Road, Tony Garry, of Davy House, Dawson Street, Derek O’Leary, of Golf Lane, Foxrock, Noel Howley, of City Quay, all Dublin; Niall McLoughlin, Sean McLoughlin and Catriona McLoughlin, all of Pollerton, Carlow; Kieran and Bernardette McAtamney, Johnstown, Naas, Co Kildare.

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