A ‘VULNERABLE’ FARMER fears proposed actions by a ‘vulture fund’-appointed receiver over his lands could his destroy his business, the High Court has heard.
Andrew McDonnell, a dairy farmer with a herd of 100 cattle on his 80-acre farm at Cappagh Newbliss, County Monaghan, said the receiver has threatened to remove and sell any items on his lands unless he removes them within seven days.
The items on the lands include any stock and farm machinery. McDonnell said the receiver has no right or entitlement to remove or sell the items.
As a result, the farmer has brought High Court proceedings against Tom O’Brien of Mazaars, who was appointed receiver over the lands, and financial fund Promontoria Oyster. The company is one of several Irish subsidiaries used by US fund Cerberus.
McDonnell claims O’Brien had written to him telling him that if he did not respond within a week, the receiver would take steps including selling items on the lands to reduce the outstanding arrears.
McDonnell fears such actions would result in the destruction of his farm business.
At the High Court, he secured a temporary injunction preventing the defendants from continuing to threaten to remove, sell or transfer any of his stock or items he has on the lands.
The injunction was granted on an ex-parte basis, where only one side was present in court, by Mr Justice Max Barrett.
Ulster Bank sale
The court heard the receiver was appointed by the investment vehicle, variously described as a “vulture fund”, which acquired 47-year-old McDonnell’s loan from Ulster Bank in December 2016.
McDonnell, who had been in full compliance with the terms of his loan, fell into arrears with the bank due to the fall in milk prices.
His barrister, Francis Trenor, said McDonnell owes approximately €420,000 on the loan.
McDonnell, after obtaining financial advice, had offered to pay some €370,000 after obtaining funds from his family, but this offer had not been responded to.
The farmer he has not been offered any alternative restructuring option by the fund, other than to redeem his loan in full.
On 29 August, the same day he made his proposal to the fund, Promontoria had decided to appoint a receiver over his property. The receiver, counsel said, then sent communications to McDonnell in relation to the items on the lands.
McDonnell said the communications represent threats against his farming business. Counsel said his client was further alarmed when the receiver asked for a list of all the assets on the lands.
Counsel said financial pressures had affected his clients health and he was “a vulnerable individual”.
In addition to seeking the injunction, McDonnell seeks damages for alleged negligence and breach of contract. He also claims the fund has acted without due regard for the Central Bank’s code of conduct and practice when dealing with a customer in arrears.
After granting the injunction, the judge said the fact €370,000 was offered on a debt of €420,000 meant that something had gone wrong somewhere. The judge adjourned the matter to a date in October.