O’DONNELL GAVE €156M PROPERTY TO HIS SON

By: Michael O’Farrell, Valerie Hanley 

SOLICITOR Brian O’Donnell – who has barricaded himself into his €7m Killiney home in a bid to ward off eviction – transferred control of a €156m investment property to his son before going bankrupt, the Irish Mail on Sunday can reveal.

The move, branded ‘fraudulent’ by Bank of Ireland, which is owed €71m by Mr O’Donnell and his wife Mary Pat, means their family stands to reap millions from the transfer while outstanding creditors remain unpaid. Because of the transfer, 31-year-old Blake O’Donnell – a solicitor like his father – now controls No.17 Columbus Courtyard, a prestigious office block in London’s Canary Wharf.

The decision of Mr O’Donnell (pictured right) to barricade himself into his Gorse Hill mansion – described as bog standard by New Land League leader Jerry Beades – on Monday sparked a week of drama and farce in equal measure.

The involvement of the New Land League – a group associated with the plight of struggling home­ owners rather than property moguls – raised many eyebrows.

The revelation that Mr O’Donnell and his wife transferred assets worth millions into the control of their eldest son, Blake, before seek­ ing bankruptcy in 2012 will add to those concerns.

Last night, Blake told the Sunday Independent: ‘I’d like to just say we’re not rich,’ adding: ‘We weren’t rich at the start.’ Brian and Mary O’Donnell bought No.17 Columbus Courtyard in 2005 for €173m with borrowings from investment bank Morgan Stanley.

Until 2010, Mr O’Donnell and his wife held the property through a UK company called Fourteen Ninety Two Ltd.

This company is controlled by a British Virgin Islands firm called Columbus Courtyard Ltd, which has changed its name to Havergate Investments Ltd.

But after 2011 – and before a 2012 UK bankruptcy application – con­trol of the off-­shore holding com pany was passed to Blake.

The registered office of Fourteen Ninety Two Ltd was changed from the former London residence of the O’Donnells to a new address in Kent.

Because of the transfer, Blake O’Donnell now controls the Canary Wharf office block, currently valued at at least €156m.

The transfer means creditors such as Bank of Ireland cannot secure any of the millions the O’Donnell family can still earn from the asset.

An MoS investigation had found that the transfer means: ? Blake O’Donnell has received more than €1m in management fees through offshore firms in the Brit­ ish Virgin Islands.

The rent controlled by Blake O’Donnell is worth €9m a year. The asset could be sold as early as this summer, realising profits of more than €10m.

This newspaper visited the five­ bedroom €1.3m rented house in Kent that Brian and Mary Pat O’Donnell vacated in recent weeks – and found a package addressed to their children on the doorstep.

A number of companies involving Bruce, Blake and Blaise O’Donnell are connected to the Kent address near Edenbridge. A company Blake controls has been paid management fees of £250k annually for the man­ agement of Columbus Courtyard. The fees are paid to Kennor Advi­sory Ltd, a British Virgin Islands firm with which Bruce O’Donnell is also associated.

According to the firm’s website, Kennor Advisory Ltd has a ‘branch office’ in East Haxted, Haxted Road, Edenbridge in Kent, the same address as Fourteen Ninety Two Ltd – and the same address where Brian and Mary Pat O’Donnell lived until recently.

Kennor is described as a ‘real estate advisory and asset management firm’ that manages ‘large commercial real estate in the UK, USA, Continental Europe and Scandinavia’.

‘We specialise in distressed portfolios which require restructuring,’ the company’s website reads.

Blake is described on the website as ‘an experienced real estate finance lawyer’ who ‘has managed and restructured real estate worth over £830m in the UK, Sweden, France and the USA’. Bruce is described as ‘an experienced project manager’ with ‘extensive experience of managing construction, leasing and renovation assignments’.

Because of BVI secrecy rules, it is impossible to establish how much this firm is making and what other assets it may manage.

But company accounts reveal the O’Donnells could realise a substantial profit by selling Columbus Courtyard as soon as this July.

The Morgan Stanley loan was paid off in 2011 when new financing was put in place. The new lenders – a consortium led by global insurance and finance giant Metropolitan Life – retained a stake as security.

Under the deal, the lenders stand to gain 26% of any profit from the sale, with the remaining 74% going to Blake O’Donnell via his BVI firm.

And since the deal expires on July 6, either a new loan will have to be put in place or Columbus Courtyard will have to be sold.

According to the latest filed accounts, for the year ending December 31, 2013, the property was valued at €156m. Gross bank borrowings stood at €142m. This means a profit of €14m could be realised, with more than €10m going to Blake O’Donnell’s company.

But it is likely, given the rising market in London, that the value of the property has increased since 2013 and it could fetch more than €156m.

Columbus Courtyard is just one of many assets formerly controlled by Brian O’Donnell’s international €1.1bn property portfolio.

The building is leased to Credit Suisse First Boston, which uses it as its European headquarters.

Other former investments include more London properties as well as blue-chip offices and luxury homes in the US, France and Sweden.

In Ireland, the O’Donnells owned 11 properties, including a house on Merrion Square as well as Gortdrishagh, an estate in Oughterard, Co. Galway.

In March 2012, their application for bankruptcy in the UK was rejected as the court found their centre of main interest was in Ireland, where they were declared bankrupt in August 2013.

However, the O’Donnells were accused of a series of moves to put assets beyond the reach of creditors – reminiscent of similar attempts by Seán Dunne and Seán Quinn.

In a series of court battles, Bank of Ireland claimed the O’Donnells had conspired to act fraudulently to prevent debts being recovered.

The bank alleged in court that Brian and Mary Pat had tried to put €255m beyond its reach. It claimed the couple tried to move assets through BVI companies for the benefit of their sons. The O’Donnells have denied these claims.

In his UK bankruptcy, Mr O’Donnell told the court that many of his assets, including Columbus Courtyard, were owned by his children through a trust. The bank described the trust arrangement as ‘a sham’.

The O’Donnell family were unavailable for comment.