Delivering boutique housing developments in south Dublin’s leafier suburbs has been a hallmark of property developer Seabren. “Gold taps, lifts and a cinema in Rathgar”, snapped one headline as Highfield, a pair of six-bedroom houses, hit the very top end of the market in late 2020, with an asking price of €3.25 million apiece. 

Building in prime locations has meant Seabren has specialised in mid to high-end infill developments that nestle among period red bricks in areas like Ranelagh, Terenure, Kimmage and Portobello.

A lucrative game in a fevered housing market, you might assume. Especially as Seabren paid an estimated €9 million for a 1.25-acre site at Annesley Gardens in Ranelagh in 2018 – well in excess of the guide price.

But behind the scenes relations between the players – Seabren director Michael Moran, whose family owns the Red Cow Moran Hotel, and developer Johnny O’Loughlin – have gone south, over money and over who owns what. In respect of some of the developments, there is even a question mark as to whether profits were made at all amid accusations of serious cost overruns.

“I paid you over €1 mill in 2020 on that basis and €100k last week. I feel like I’m being abused and have been used like someone’s sugar daddy/rich uncle,” Moran wrote O’Loughlin last March in an email exchange that shows how charged their business relationship had become.

The two had been working together for five years. Weeks later they were in court, at loggerheads over fees and the division of profits.

By then, O’Loughlin had registered a lis pendens on three development sites worth around €20.4 million. He was suing Moran and Seabren claiming he and his company Mount Pleasant Development (MPD) were owed just shy of €5 million in construction fees, investment equity and profits. 

The lis pendens was lodged on April 16 2021 affecting Annesley Gardens in Ranelagh – an upmarket housing development with a projected value of around €31 million, and two fast-track apartment schemes in the pipeline, one at the former Europa Motors site in Blackrock, the other a €62.5 million development at The Glebe in Crumlin.

In Moran’s words, O’Loughlin had triggered the “nuclear” option. The lis pendens acted as a red flag to any would-be buyer or investor that ownership of the lands was in dispute. Moran wanted the lis pendens removed pronto claiming it was an abuse of process. He maintained O’Loughlin did not have an equity or proprietary interest in the developments and that the lis pendens was a tactic intended to paralyze the business, imperil the viability of the three developments and potentially prejudice Seabren’s third-party financing arrangements.

It took time but the lis pendens was recently lifted by Justice Brian O’Moore in the Commercial Court, subject to certain, and significant, conditions. Moran’s side has given undertakings to keep O’Loughlin in the loop about Seabren’s property sales and to set aside a surplus sum from the sales process to deal with O’Loughlin’s legal claim for nearly €5 million. From O’Loughlin’s point of view, this essentially amounts to the same outcome as having the lis pendens in place and it guarantees funds in the event his claim is successful.  

When it comes to the meat of O’Loughlin’s case that he is due millions in profits under a partnership agreement he signed up to with Moran in 2016, there have been no material concessions. He alleges monies due to him were rolled into new building projects and that Moran, who was always in charge of the financial side of operations, is wrongly claiming full ownership of development sites Seabren was meant to be holding on trust for the joint venture.

Moran denies monies are due to O’Loughlin or that he has any claim on Seabren’s developments. He has dismissed O’Loughlin’s case as a “bald assertion of entitlement” without merit.

The businessmen are utterly at odds in their positions and have set out on affidavit divergent accounts of their business dealings. Resolving the row could involve a six-week hearing, the court has been told. A trial date has yet to be fixed.

O’Loughlin is bringing the case in a personal capacity with Mount Pleasant Development Ltd, of which he is a director. The action is against Moran and various companies linked to him; Seabren Holdings Ltd, Seabren Developments Ltd, Refit Seabren Unlimited and HITC Properties Ltd. Moran wholly owns Seabren Developments through Seabren Holdings. He has a 15 per cent direct stake in real estate firm HITC, majority-owned by members of his family, and a further 10 per cent interest through Seabren Holdings. 

The 2016 arrangement

The two businessmen began working together in around 2016 when they agreed to develop four sites in Dublin at Crumlin, Portobello, Walkinstown and Terenure. A heads of terms agreement put the joint venture on a contractual footing.

Originally there were to be three parties to the deal. Each would put up 30 per cent of the purchase price and development costs with the balance to be provided by Moran firm Refit with a loan from Seabren Developments.

The properties were acquired by Seabren Developments.

O’Loughlin’s firm Mount Pleasant was to do the refurbishment and development works subject to a 10 per cent margin. It would receive 40 per cent net profit compared to the 30 per cent on offer to the other investors.

According to Moran, the project did not turn out as expected. The third-party Damian Murray, an accountant with the Red Cow group, wasn’t in a position to contribute financially and withdrew. Next, Moran claims cost overruns meant Seabren ended up paying €700,000 towards the development of the four sites while O’Loughlin provided €200,000.

“You’re some man, you would prefer to write me hot and heavy threating (sic) mails rather than accept your reality and work positively to produce a draft “2021 deal”

In his version of events, spiralling costs meant that the residential units were disposed of to buyers with no profit to divide. The only party to generate any benefit from the project, Moran claims, was Mount Pleasant Development which was paid €2.32 million for refurbishment works.

When the four housing projects were done, the joint venture was at an end, Moran maintains. No other contract was signed by the parties, although there were attempts to do so in 2019, he says. Post the 2016 deal, Seabren allegedly eschewed partnership in favour of hiring Mount Pleasant as a contractor. If true, this would mean Moran, and Moran alone was in the driving seat on future projects.

Moran cites a series of construction jobs in which he allegedly retained O’Loughlin’s services, sometimes under RIAI Construction Contracts. He goes into specifics alleging that O’Loughlin provided labouring services for a daily rate of just €150 on the €30 million Annesley Garden project. There was also the development of two three-bedroom homes at Ontario Court, Ranelagh on a site purchased by Seabren Developments for €720,250. O’Loughlin was also said to have worked as a contractor on the Riverdale Mews development in Kimmage and on another site in Terenure.

By 2018, most of the funding for these projects was coming from specialist property lender Castlehaven Finance. 

Partners?

According to Moran, there was a further break between the parties. He says Seabren and Mount Pleasant’s parted ways on the construction of the upmarket Highfield Road development in Rathgar because of cost overruns in an earlier project in Terenure, a claim utterly rejected by O’Loughlin. Explaining the decision in legal correspondence long after the event, Moran claimed MPD was no longer a good fit for Seabren. “On a personal level I like Johnny – he is a hard worker, is good fun, he is full of enthusiasm and he can be very convincing. But on a professional level Johnny is quick to pick a fight,” he claimed.

As previously stated, the two businessmen have very different takes on the events that led up to their court dispute. As far as O’Loughlin is concerned, he stepped away from the Highfield job to deploy his development expertise more broadly within Seabren, the joint venture he was running with Moran.

Regardless of whose version is correct, the contract with Mount Pleasant Development was terminated in October 2019. A new builder, Mount Collins Homes, was brought in.

So where does this leave the parties when it came to the three major development sites that O’Loughlin would later put a lis pendens on?

Again Moran minimises O’Loughlin’s involvement putting him in the role of a sometimes contractor. The Glebe in Crumlin, the site of a proposed SHD 152 apartment development, was acquired by Seabren Developments in March 2020 for €1.9 million with financing from Castlehaven and later the Israeli backed Lotus Investment Group. Moran says O’Loughlin’s vehicle Mount Pleasant has no interest in the venture but was allegedly hired by him on a daily rate (with an incentivised target) to secure vacant possession of the site from various parties who had business interests there. Likewise, Moran claims MPD’s services were employed, on a daily rate, for snagging at the upmarket Annesley Gardens development in Ranelagh. In respect of the third site, the nascent Europa development in Blackrock, he notes O’Loughlin has no involvement in the project which is owned by HITC rather than Seabren – a company with multiple shareholders.

..cash flow is currently on a knife edge and all loans I have with the family are out of date, forbearance is with the expectation that all available surplus funds are to be repaid to them first

From an email allegedly written by Michael Moran

Despite his account of their chequered business history, Moran says by 2021 he still remained open to a future relationship with O’Loughlin, if the developer came up with a satisfactory proposal. He says he was of the view that if they could strike a deal there would be plenty of money to be made by all parties especially in relation to the development of The Glebe.

Matters come to a head

A meeting took place between the two businessmen at the Red Cow last February. This was followed by an exchange of emails in which O’Loughlin repeatedly asked Moran to prepare a profit and loss document in respect of the various developments they had worked on. Moran says this request was in the context of discussions on a new agreement and that he was a “bit taken aback” by O’Loughlin’s demand as he seemed to be suggesting he had a right to financial information about Seabren’s financing arrangements.

He said he told O’Loughlin they worked well together, it had been an interesting experiment but ultimately a financial failure. 

O’Loughlin claims he wanted the information because he was out money for construction fees and believed there were substantial profits to be distributed under the joint venture partnership that had been diverted to other building projects he was not a party to. For example, he claims Moran told him that profits from various developments were mixed up in the Europa project in Blackrock, owned by HITC.

Emails flew back and forth. O’Loughlin claimed he had caught Moran telling lies, that payments to Mount Pleasant were not up to date and that he was owed “circa 500k”. In one exchange, Moran wrote: “cash flow is currently on a knife-edge and all loans I have with the family are out of date, forbearance is with the expectation that all available surplus funds are to be repaid to them first”.

He later said O’Loughlin had focused his attention on cash at a time when he was at his weakest.

A breakdown

Relations became ever more fraught as Moran would not accede to O’Loughlin’s demands to provide financial information.

On March 10, O’Loughlin threatened to withdraw his services, institute legal proceedings and file lis pendens on the development sites. “I’m really disappointed that after 4 nearly 5 years working together you will not even take a phone call from me,” he wrote. “It’s with a heavy heart that I would even make such a threat but I feel you have left me no choice,” he added.

He also argued he could not credibly put forward any suggestion for a new business arrangement if Moran would not provide visibility on key financial information.

“You’re some man, you would prefer to write me hot and heavy threating (sic) mails rather than accept your reality and work positively to produce a draft “2021 deal”,’ Moran wrote in reply. “Think about this for a minute and check yourself in your own private place…” he urged O’Loughlin.

The court was told it beggars belief that a working relationship would have persisted if the four properties dealt with under the 2016 agreement had been such an abject failure and financial disaster.

In another email, he wrote: “Johnny I like you, I consider myself loyal to you, we have many common acquaintances and I’m keen to award you with an appropriate payment at an appropriate time, but a 2021 deal must accurately reflect the various inputs, performance time and risks that each of us have took on over the years.”

Within a fortnight, HITC was sent an invoice by O’Loughlin’s side. An accompanying document acknowledged that over €7 million had been paid to Mount Pleasant to date and stated that half a million was outstanding in construction costs. This was followed by a writ with a claim for circa €4.9 million.

That legal claim broke down as follows: €502,961 in construction fees due to Mount Pleasant; €911,836 estimated profit share of the joint venture on completed projects to date: €200,000 for the return of O’Loughlin’s initial 2016 investment and an estimated value of his interest in the outstanding developments: Glebe House – €1.67 million (could increase significantly) and Annesley Gardens – €1.7 million.

Where is the money?

From O’Loughlin’s perspective, there were a number of reasons why the business arrangement with Moran soured. Chief among them was the fees and profit share issue and the alleged “cavalier” intermingling of partnership money in unrelated side projects run by Moran, such as the Europa site. “As an equity partner I’m well within my rights to want to understand the extent to which our assets have been leveraged as security in other transactions as it impacts the timing of my ability to liquidate my equity position,” O’Loughlin had written in the heightened email exchange of last March.

He was also unhappy that from 2018 on, Moran had sought to increase from 9 per cent to 15 per cent the interest charged on financing provided by his companies towards development costs. Furthermore, O’Loughlin claimed Moran had failed on the company’s behalf to repay third party loans in a timely manner which resulted in higher repayments. Another major bone of contention for O’Loughlin was the alleged discovery in March 2021 that a charge of €1.8 million may have been secured on Glebe House without his knowledge. He claims the development was supposed to remain unencumbered.

The base position of O’Loughlin and Mount Pleasant is that the joint venture agreement with Moran in 2016 is extant and that substantial profits made from early developments were reinvested in projects such as The Glebe and Annesley Gardens which may yield a combined profit of €6.75 million. He maintains he is due his share.

In O’Loughlin’s account of their earliest business dealings, he says he had a number of development opportunities in the bag when he approached Moran in November 2015 in need of a financial partner. He says he has paperwork that shows he was to get an enhanced 40 per cent equity split on the basis that he had been the one that delivered the deals.

O’Loughlin also says he has emails from 2018 showing the parties accepted the original 2016 investment would roll over and that the joint venture was still in operation. He claims a new joint venture was agreed upon between him and Moran in 2019. While it wasn’t signed, he says his company MPD billed to it and it was registered for Vat purposes. 

I was satisfied that after five years of endeavours the joint venture was a success and now had secured a prize asset in The Glebe site, debt free

Johnny O’Loughlin

O’Loughlin writes off Moran’s assertion that MPD was retained as a contractor on a number of building projects as ‘absurd’. He insists he was at all times a partner in the thick of things. For example, he claims he was not fired from the upmarket Highfield job because of budget overruns. Rather he says he left so he could concentrate on “other more pressing development issues” within the joint partnership such as the design for Annesley Gardens, the sale of Cromwellsfort Road in Dublin 12 and reconciling site issues at The Glebe. His intimate involvement in the business, negotiating with contractors and designers, is borne out by the media coverage, he claims. For example, The Irish Times wrote of Annesley Gardens in November 2020:

“It’s the latest luxury home offer from Seabren Developments, run by Johnny O’Loughlin and Michael Moran, of the Moran Hotel Group. The pair made headlines 2½ years ago when they purchased the 1.25-acre site for €8.7 million, significantly above its guide price of €4.9 million-plus. The deal was described at the time by selling agent Iain Finnegan of Finnegan Menton as a “record price for a piece of land without planning permission”.”

O’Loughlin says Moran would not have countenanced him representing himself to the media as the co-developer of a multi-million euro development if he were being paid €150 a day as a contractor. Moran, however, says nothing should be read into his silence.  “I have no interest in the limelight and in drawing attention to myself,” he said in an affidavit. “I am not sure what steps he required me to take. I did not give any interviews and I was not present when the press were interviewing him,” he added.

Reaping the fruits

Finally, O’Loughlin maintains that it beggars’ belief that a working relationship between him and Moran would have persisted as long as it did if the four properties dealt with under the 2016 arrangement was the abject failure and financial disaster, the hotelier claims it to have been.

On the contrary, O’Loughlin says by the end of 2020, with the investment loan facility from Castlehaven discharged, he believed the joint venture was finally unencumbered and that the money could flow in. “I was satisfied that after five years of endeavours the joint venture was a success and now had secured a prize asset in The Glebe site, debt-free.”

But February last year, at their meeting in the Red Cow, Moran allegedly told him cash flow was tight and that he did not see the joint venture’s endeavours bearing fruit for another three years. “This shocked me,” O’Loughlin said in his affidavit. 

While Moran allegedly dismissed O’Loughlin’s suggestion to draw down available funding from Lotus as being “too expensive”, the developer claims he subsequently found out that Seabren had secretly obtained finance from Lotus which created a fixed and floating charge over Seabren’s assets including on The Glebe lands.

O’ Loughlin said by this stage his side had been bearing construction project costs for three to four years. He wanted a picture of what was going on. At the meeting in the Red Cow Inn, he said Moran gave him a commitment to unpick the €50 million Seabren had spent on developments since 2016 and provide Mount Pleasant with a financial breakdown. However, O’Loughlin claims Moran reneged on the promise in the series of emails that followed the meeting. His subsequent decision to lodge the lis pendens was justified in circumstances where there had been a “substantial misappropriation” of money, O’ Loughlin maintains.

The lis pendens has now been lifted and it was back to basics at a pre-trial discovery battle in the Commercial Court last December. With almost everything in dispute between the parties, their lawyers returned to the roots of the row – scrambling for documents that would prove the source of the funding for the first four properties Moran and O’Loughlin agreed to develop in a joint venture in 2016, the starting point and cornerstone of a multi-million property business and of a highly charged legal dispute.

Earlier this month, the parties informed Justice O’Moore that they were in negotiations to try and narrow down the issues for trial. More time was required. In the meantime, O’Loughlin’s side said it was appealing the judge’s decision to lift the lis pendens.

Putting the matter back for a fortnight, the judge asked the parties “forcefully” to consider mediation. He said the case was going to be a “very heavy piece of litigation”, that would absorb a lot of the resources of the Commercial Court. The case was fundamentally about money, not the stewardship of a child or a property to which people have emotional connections, he said. “It’s about cash, a business arrangement,” he added. The court, Justice O’Moore said, had previously been critical of both sides in the dispute – O’Loughlin in respect of his motivations in lodging the lis pendens and Moran’s side for the lack of transparency in the joint venture that made it difficult to “unscramble the omelette” financially.

The Commercial Court hearing may not be the end of the matter either, the judge pointed out. He referred to a completely separate business dispute involving a company called Monaghan Mushrooms. It lasted three weeks in the High Court, three days in the Court of Appeal and a day in the Supreme Court which sent it back to the High Court to start again from square one. The parties in Seabren are facing that type of courtroom saga, the judge warned. “There may be one winner or two losers. There won’t be two winners.”

Lawyers for both parties agreed to consider his comments.