Talks are continuing in a High Court action affecting some 300 cases in which investors claim they lost hundreds of thousands in a property fund which later collapsed.
The case of Bernadette Goodwin, an 83-year-old widow from Dublin, was due to start on Tuesday in what is the first of around 300 cases of investors suing over losses sustained after they put money into five "Belfry Funds". Those funds were promoted by AIB and others and were invested in commercial property in the UK but collapsed in 2008.
Following day-long talks on Tuesday, lawyers for both sides asked for more time to continue talks. The court heard there was good progress but because they concern not just Mrs Goodwin's case but all the linked cases it was possible it could take more than a week to resolve privately.
John O'Donnell SC, for Mrs Goodwin, asked the case be simply adjourned until Wednesday but he did not wish to say whether it would be just for mention or for hearing. Martin Hayden SC, for AIB, agreed.
Mr Justice Brian O'Moore agreed to adjourn but said he was not going to waste any more time and, for the moment, it is listed for hearing on Wednesday.
The investors say they invested sums between €100,000 and €400,000 in the funds which they alleged were promoted between 2002 and 2006 by AIB and four directors of various companies in the Belfry Properties group. They included property investor Tony Kilduff, and a former head of AIB private banking, John Rockett.
Following the collapse of the funds, they initiated claims in August 2014 seeking damages on grounds including alleged negligence in the operation of the funds.
The defendants, who are each separately represented, denied the claims.
The essence of Mrs Goodwin’s claim was that in July 2003 she and her late husband were induced by AIB as placing agent to invest £150,000 (€174,000) in the "Belfry 3 fund" by the purchase of shares in the Third Belfry Properties (UK) plc.
That company then undertook the investment, via a wholly owned UK subsidiary, which “geared up” the investment at a ratio of 20:80, with borrowing from Bradford & Bingley, to purchase properties in the UK.
The investors allege this was misrepresented to them and also claimed damages.
AIB and the other defendants deny this and say the investment prospectus indicated it involved a “degree of financial and commercial risk”.
The investors argue the prospectus did not detail the structure of the investment, or that the intended borrowing would include a Loan-to-Value covenant.
The effect of this would be that if the value fell below a certain percentage, typically 80pc of the purchase price, the loan with Bradford & Bingley would go into default. The properties in Belfry 3 fell below the critical value and, it was claimed, had to be sold.
Belfry 3 collapsed and Mrs Goodwin lost the entire investment.
