CEO liable for €9m over 'sharp practice'
THE CEO of an aircraft leasing company is liable for more than €9m under a personal guarantee he gave for a loan, the Court of Appeal ruled.
Avolon Airspace CEO, Domhnal Slattery, is liable for the money to Friends First following what the appeal court said was "sharp practice" which led to a clause being "slipped" into a deed which, unknown to the lender, removed that liability. That "chicanery" entitled Friends First to rectification of the deed, the three-judge court said.
It also ruled Mr Slattery is not entitled to €100,000 damages awarded by the High Court to him against Friends First over his right to confidentiality.
Mr Slattery of Ailesbury Road, Ballsbridge, Dublin, had sued Friends First arising from the unsuccessful purchase of the St Regis Hotel in Washington DC.
His private equity firm, Claret Capital Ltd, and Friends First were part of a consortium which bought the hotel for €162m ($180m). To complete the deal, Friends First agreed to advance loans to two Claret Capital related companies.
Mr Slattery and other directors of Claret entered in 2008 into guarantees of a €13m ($14.05m) loan and also took personal loans, in Mr Slattery's case for €900,000 ($1m), from Friends First Finance.
Mr Slattery later argued a clause in a deed of pledge of July 2009 meant Friends First's recourse to him was limited to the value of his 265 shares held in an airline company, Jetbird.
Friends First said it was unaware until 2010 of that clause and sought rectification.