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Sasko Lazarov/Photocall Ireland
loan sales

Vindicated, relieved, frightened: Michael O'Flynn after his court battle with Blackstone

The Cork developer has alleged that Blackstone completely changed strategy once it acquired his loans.

MICHAEL O’FLYNN HAS spoken of his relief at being vindicated in the High Court yesterday, when the Cork developer saw off a challenge from US company Blackstone to his control of O’Flynn group companies.

Speaking with Pat Kenny on Newstalk this morning, the developer said, however, that the private equity player’s change of tack after it bought his loans from Nama was “frightening”.

Blackstone, through its subsidiary Carbon, bought €1.8 billion worth of O’Flynn’s loans earlier this summer, before moving to appoint receivers over several companies in the O’Flynn group and removing senior executives from their positions.

He said that Blackstone’s proposed strategy for the O’Flynn loans before and after the sales process was concluded were completely different.

The Cork based property development an Bill Cullen and Jackie Lavin, friends of Michael O'Flynn, outside the Four Courts yesterday. Sasko Lazarov / Photocall Ireland Sasko Lazarov / Photocall Ireland / Photocall Ireland

“I asked them (Blackstone) what their plans were. Blackstone outlined a very acceptable and interesting way forward for us and for our group.”

However, shortly after the sale was agreed, differences between the two parties emerged over the interpretation of the restructuring agreements that had been struck when Nama held the loans.

There is no doubt about it: Blackstone before the event and Blackstone after the event are two different Blackstones.

The developer, who is responsible for several high-profile building projects including the country’s tallest building, the Elysian tower in Cork, also warned that Nama’s dealings with potential loan purchasers will be brought into the spotlight.

“I would say Nama are also dismayed (at what happened)…the discovery process will involve Nama, has to involve Nama, because that trade took place between Nama and Blackstone.”

The world is interested in this because a lot of people are going to be in a similar situation as us.

Blackstone and O’Flynn will face off in a full court case to decide control of the company on October 7th.

O’Flynn also accused the loan purchaser of only calling in his personal loans, which triggered the appointment of receivers over the companies, because they wanted to wrest control of his empire from him.

“The last thing they wanted was the money, they wanted the consequence of me not paying the money.”

The loans will be repaid on Friday, he said.

He also warned that Blackstone could be held to account for any damage that may have been caused to the O’Flynn group while it was under its control, although there is no evidence of any ill-effects.

“All the events of the last two weeks and the consequences will be actionable”, he said.

“We’ve been directors of these companies, some of them, for 36 years. It’s very hard for people to come in for two weeks and be directors of companies of that scale.”

O’Flynn thanked his immediate and extended family as well as group employees for “an incredible rallying of the troops”.

Read: Michael O’Flynn succeeds in having examiners removed, will repay €24.9 million in loans on Friday>

Read: Property developer Michael O’Flynn – I can repay €24.9 million loans ‘immediately’>

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