Libya’s sovereign wealth fund has won a long-running UK court battle over a £17.6m debt owed to it following a deal to buy Banco Santander’s sprawling Madrid headquarters.
The property sold last year for almost £250m while a parallel set of “labyrinth” legal disputes has rumbled on, triggered by the global financial crisis that forced its former owners, Marme Group, into administration in 2014. Its ownership was not disputed in the latest case involving the Libya Investment Authority (LIA).
Marme Group’s shareholders, Glenn Maud and Derek Quinlan, had entered into a £1.38bn loan deal to finance the purchase of the property in 2008.
Mr Maud was director of a firm Propinvest Group Limited that borrowed £11m from LIA in 2008 as part of the deal to purchase the Santander building.
But due to the financial crisis the firms were unable to refinance the loans and Marme and Propinvest entered into voluntary administration in 2014.
LIA pursued Mr Maud, who had given a personal guarantee on the loan, for the repayment of the debt which then stood at £17.6m, and in 2014 applied for a bankruptcy order against him.
But, due to EU sanctions again Libya, Mr Maud successfully applied for the LIA case against him to be stayed and only now has the case finally been concluded following the funds being release from the building’s sale.
On Friday, Mr Justice Snowden, sitting in the UK’s high court, approved LIA’s petition against Mr Maud for bankruptcy concluding it was “entirely rational”.
“Mr Maud does not dispute the existence of LIA's debt, and it formed the basis of the LIA Petition which was presented on 31 July 2014 when the debt was about €22.2 million which equated to about £17.6 million,” he said in his judgement.
“Although the LIA Petition was first in time, it was stayed for about a year in June 2015 after Mr Maud successfully applied to set aside the LIA's statutory demand against him on the basis that it would be unlawful for him to pay the debt due to the LIA by reason of EU sanctions.
“For the reasons that I have given, subject to any application that I should not make an immediate order or should order a stay pending appeal, I would intend to make a bankruptcy order in respect of Mr Maud on the LIA Petition. I shall therefore adjourn both Petitions and all consequential matters to such a further hearing on a date to be fixed.”
Mr Maud had argued the ruling would be “pointless” as he had no assets, however, the judge ruled he was not convinced Mr Maud had given a “full and complete account of his assets and affairs” due to his ongoing financing of “substantial and relentless” court proceedings in the UK and Spain.
Edgeworth Capital, which is linked to property billionaire Robert Tchenguiz, had also filed a petition for Mr Maud’s bankruptcy, claiming to be owed £35 million.
The judge said it was not necessary to make a ruling on Edgeworth’s application as he had ruled in favour of LIA’s.
Santander has continued to occupy the large campus, known as Financial City, as a tenant since selling it and is reported to pay millions of euro a month in rent.
The 250 hectare site has nine buildings including offices, restaurants and a residence for employees of the bank.
