Celtic Tiger Madness
A client of the firm was induced to invest €1.5 million which was 100% financed by an Irish bank in a highly geared UK hotels portfolio. The client had a significant concentration of his portfolio in property already and also had a high personal gearing in his existing investments. Following the global collapse in the world economy post Lehman Brothers the collapse in property values in the UK resulted in breaches of banking covenants which allowed the lenders to the UK portfolio take control of it and sell it to satisfy the debt resulting in a 100% loss to investors. The Irish bank sought full repayment of the €1.5 million from the client who joined the firm of chartered accountants as co-defendants in the judgement action and successfully obtained a significant contribution to the repayment of the debt by the firm of chartered accountants to avoid judgement against him. The settlement was based in part on the strength of the expert witness report with regard to breaches of ethical codes and guidelines by the firm of chartered accountants.