Developer wins reprieve in court over calling in of bank loans
Dozens of jobs would be lost by forcing a Belfast property investor to sell off a major UK retail portfolio and repay multi-million pound bank loans, the High Court has heard.
Chris Walsh also claimed he would face likely bankruptcy if a bid to dispose of all assets prematurely was allowed.
The alleged consequences were set out as a judge granted him a continuing injunction to stop the Bank of Scotland taking action against him or his companies.
A full trial in the case, which centres on disputed assurances about the length of time allowed to pay back the loans, is due to take place early next year.
Mr Walsh's assets include properties at Kensington High Street in London, the Arndale shopping centre in Leeds, the Riverside shopping centre in Thetford, Direct Line House in Leeds, the Nag’s Head shopping centre in London and Balmoral Plaza at Boucher Road, Belfast.
By 2007 the portfolio was valued at £76m, with all but one of the transactions said to have been purchased through 20-year bank loans.
The court heard he was identified as a preferred customer as the bank sought to lend more money.
He agreed to a proposal to acquire Direct Line House for £39m, but claims he would never have done so without an assurance that a three-year loan could be renewed for a longer-term facility if the property was not sold.
Mr Walsh claimed to have become aware of a “sea change” in the bank's attitude to lending towards the end of 2008.
In January 2012 he alleged he was informed of a non-negotiable corporate policy decision to wind down its former bank loan book within 12-18 months.
It was claimed that he was left with two alternatives: either dispose of all assets voluntarily or the bank would appoint receivers.
With doubts over whether there would be enough equity to repay the loans, Mr Walsh and connected firms could have to make up the difference in guarantees, the court heard.
Detailing the alleged consequences, Mr Justice Weatherup said: “A sufficient call-up of these guarantees would be likely to lead to his personal bankruptcy and further to the liquidation of the remaining companies, which companies he says were not otherwise in default of their bank facilities.
“The damage caused would be irreparable and uncompensatable with a loss of 26 jobs,” he said.