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Tony O'Reilly must repay E22.6m now

Friday, June 27 14:18:12

Tony O'Reilly has lost his legal attempt to delay a court order demanding that he pay the E22.6m he owes to AIB.

The former media tycoon, who is now insolvent, faces a forced sale of assets in order to satisfy the court judgment.

The judge, Mr Justice Peter Kelly, said Mr O'Reilly was insolvent and the probability was that the sale of his unencumbered assets would not cover the sum owed to AIB.

Kelly said AIB had the right to be first in the queue of creditors having secured the judgment and it would be prejudicial to the bank to prevent it from exercising its legal rights.

O'Reilly had asked for a six-month stay on the judgment to facilitate an orderly sale of assets.

This is the worst possible outcome for O'Reilly, the former owner of The Independent in the UK through his company, Independent News & Media (INM).

O'Reilly, 78, who was once Ireland's richest man, lost control of INM to business rival Denis O'Brien, who is now reputed to be the country's richest man.

A lengthy Irish Times profile, "Ignominious end to career of Ireland's first business superstar", charts O'Reilly's rise and fall.

It states: "The two biggest financial bets of O'Reilly's career – INM and Waterford Wedgwood – proved the catalysts for his downfall."

The article tells how O'Reilly, in company with his brother-in-law, Peter Goulandris, lost more than E400m (£320m) trying to save Waterford before it collapsed into receivership in 2009.

It also says he "wasted E350m buying shares in INM prior to its restructuring, in a vain attempt to ward off the advances of Denis O'Brien."

Ciarán Hancock, the Irish Times's finance correspondent, argues that O'Reilly relied on INM's dividend to maintain his lavish lifestyle, "which was worth an average of E14m annually to him in the decade until the economy crashed."

In 2007 alone, he drew almost E30m from the company and his stake was valued at close to E1bn (£800m). But O'Brien squeezed O'Reilly out of INM and cancelled its dividend. O'Reilly found himself without income and no way to service his loans.

Ever since, O'Reilly has been seeking to cut a deal with his lenders by selling off various assets.

One asset he still has is a stake in the oil exploration firm Providence Resources, which is chaired by his son, Tony Jr. But the Irish Independent (one of O'Reilly's former papers) reports today that the company suffered an operating loss in 2013 of E7.2m, up from E5.4m the previous year.