Algarve property deal turns sour as developers sue partner
Posted on 14th September 2022 at 15:16
Developers want court to enforce contract and claim damages of €600,000 over alleged breaches to date
Property developers Mark Fenton and Conor Clarkson have brought High Court proceedings against businessman Jeffrey Leo and linked corporate entities over an alleged failure to comply with an agreement to develop lands in Portugal.
Their action is against Mr Leo as well as three corporate entitles allegedly linked to him — Steelworks Investments Ltd, 74 Oceano Clube LLC, and Steelworks Limited LLC.
The court heard that Mr Leo is based at Dundrum House Hotel and Golf Course in Co Tipperary, while Steelworks has a registered address in Ashbourne, Co Meath. The other entities are both partnerships registered in the United States.
Represented by Keith Farry, Mr Fenton from Cratloe Co Clare and Mr Clarkson, of Stepaside, Dublin, who are experienced in property development, claim the defendants have not complied with the terms of their agreement, nor have they repaid the plaintiffs monies allegedly due to them.
They claim they entered into a partnership agreement in 2015 with the defendants to acquire and develop sites in the Algarve for a sum of over €5.3 million.
The plaintiffs were to promote the project and oversee its development and approached several parties, including Mr Leo to do a joint venture to develop the plots.
The agreement concerning this joint venture would see the parties enjoy a 50-50 profit split, and it was claimed that Steelworks Investments Ltd would provide the finance required to develop the lands in the Algarve into villas. Mr Leo allegedly purported to act with the authority of the Irish and American based companies.
The plaintiffs claim that there were difficulties with the agreement from its inception.
While some monies were paid as a deposit to acquire the lands, there was a shortfall in the agreed funding. The plaintiffs claim that they had to obtain funding from other parties to help close out the purchase of the land.
It is also claimed that buyers had been lined up to purchase some of the properties but had fallen away due to delays in completing the project due to a delinquency in payments to the builder by the defendants.
Arising out of these difficulties, the parties agreed to revise the agreement between them.
It is also claimed the defendants broke the agreement between the parties by selling some of the properties without the plaintiffs getting any of proceeds. This it is claimed was done to unjustly enrich the defendants and misappropriate the funds contrary to the agreements.
The plaintiffs also claim that Steelworks Investments has sold other properties of which they are the ultimate owners, including one at the K Club and Celbridge Manor Hotel, and is believed to be winding down operations in Ireland.
They also claim that the ultimate owners of that entity are US passport holders and that Mr Leo is a flight risk.
In their action, plaintiffs seek orders from the High Court restraining the defendants from breaching the agreements that the parties allegedly entered into regarding the lands, or from selling the lands. They also seek an order requiring the defendants to specifically perform the alleged agreement.
The plaintiffs also seek damages against the defendants for alleged breach of contract, negligence and misrepresentation, and judgment in the sum of €600,000.
The matter was mentioned, on an ex parte basis, before Tuesday’s vacation sitting of the High Court. Ms Justice Eileen Roberts granted the plaintiff’s permission to serve the proceedings on the two defendants that are outside of the jurisdictio — Ocean Clube and Steelworks Limited which have registered addresses in Delaware.
The matter will be mentioned before the courts at a later date.
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