High Court hears disgraced solicitor used €3m belonging to property firm for personal lifestyle

Disgraced solicitor Michael Lynn used around €3m belonging to his Kendar Holdings foreign property company to fund his personal lifestyle, the High Court heard.

High Court hears disgraced solicitor used €3m belonging to property firm for personal lifestyle

By Ann O'Loughlin

Disgraced solicitor Michael Lynn used around €3m belonging to his Kendar Holdings foreign property company to fund his personal lifestyle, the High Court heard.

The expenditure included stg£25,000 on his own private box at the redeveloped Wembley Stadium in London and some €301,000 in a pension fund for his retirement.

The struck-off solicitor, who fled the country in 2007 leaving an estimated €80m in debts and who is still in a Brazilian prison fighting efforts to extradite him, paid the money into two pension schemes with Canada Life and Aviva between 2004 and 2007, the court heard.

Kendar Holdings liquidator Martin Ferris, who has spent several years trying to find where the money went, was today granted an order by the High Court that Canada Life and Aviva pay the surrender value of those pension funds to the liquidator in order to recover some money for the creditors.

Andrew Fitzpatrick SC, for Mr Ferris, said among those creditors are people who paid deposits for holiday homes in Hungary and Portugal where Kendar's business model was to fund construction of these properties using deposits. Included in the creditors list is €278,500 paid in deposits while there is another €1m owed to unsecured creditors.

The liquidator discovered that someone had removed the computer servers for Kendar which meant there were very few books and records to work on to trace where the money went.

However, counsel said, trial management accounts were created based on various bank accounts, including Lynn's own personal account into which various large cash payments were made.

Under companies legislation, this was a very clear case of fraudulent disposition of company property which gave the power to the court to order the pension monies be paid to the liquidator, counsel said.

Mr Fitzpatrick said the liquidator had written to Mr Lynn, who the court heard is still incarcerated in Cotel Prison, Recife, seeking assistance in tracing monies.

While Mr Lynn had offered assistance he never actually gave any information. In fact, Lynn demanded information from the liquidator and made various allegations against the liquidator, counsel said.

Mr Ferris, in his investigations, discovered many serious matters concerning Mr Lynn, primarily that he used some €3m of company money for his own personal expenses, including the box at Wembley, counsel said.

Mr Fitzpatrick also said there was no question of impropriety on the part of Canada Life and Aviva who were prepared to return the money provided it was by court order.

Papers in the application to have the funds paid to the liquidator were served on Mr Lynn in prison but he was not represented in court.

Ms Justice Marie Baker said she was satisfied that the payments into the pension fund were done to deprive the company of money and were therefore a fraudulent disposition under Section 608 of the 2014 Companies Act providing the power of the court to order the return of those assets.

She said the amount to be paid out is to be whatever the invested value the fund stands at on the date of the perfection of the court order.

The judge also said it was clear the pension payments were excessively large having regard to the size of Kendar Holdings and its turnover.

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