During the property boom, values rose beyond reason and you can just picture Brian O'Donnell and his wife looking over things and deciding that their best investment was in real estate. They borrowed and bought, and values went up, so they borrowed and bought some more. They didn't see any dark clouds on the horizon.
What goes up comes down, of course, and the same could be said of land valuation. The property that served as collateral for other loans is no longer worth as much as it once was, and now that the O'Donnells have amassed a large portfolio, the find themselves running short.
The Bank of Ireland is suing the couple because they're running behind on loan payments. The family assets were laid bare in court, but the bank is casting doubt as to the true value of the couple's home on Vico Road in Kilkenny. And the office block near the White House might not be worth $138.4 million these days, so does that mean the outstanding balance on the loan of $97.7 million indicates the mortgage is under water?
The same could be said of the investment property in London's Canary Wharf district, along with a building in Sweden. Mr. and Mrs. O'Connell say they have assets valued at E1.089 billion, but can they really expect to pay back E886 million that funded the purchase of those assets?
Are the O'Connells in over their heads at this point?
Like Frank Cowperwood of The Financier, all they need is more time, until the dust settles on the latest financial crisis. And like Mr. Cowperwood, they may not be granted that time.
It's clear that they're stretched to the limit and now that their creditors have seen the level of debt, what are the chances that other lenders will call in their loans as well?
At least these days there's not the stigma attached to bankruptcy as there once was. And Mr. O'Donnell can always hope and pray that his income as a solicitor reaches the level he's claimed to the Bank of Ireland. The bankers, however, have their doubts.
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