Thursday, December 11, 2008

Laing O'Rourke facing legal battle over Marbella development

Laing O’Rourke faces a potential winding-up order in the Irish courts following a dispute with Irish developer John Magnier.

The Times reported that Magnier, Ireland's seventh-richest man, is considering a "cease trade" order, after Laing O'Rourke refused to pay ВЈ3m awarded to him in a court ruling last week.

The dispute centres on a property development that Magnier and O'Rourke were planning in Marbella, Spain.

The contractor was using a special purpose vehicle called Explore Investments to buy half of a 4ha tract of land in the resort, which was owned by Magnier's companies Daltwo Holdings and Marbetwo Holdings.

The plan was to develop the land, one of the few remaining plots boasting a beach frontage still to be developed, as part of a joint venture.


Laing ORourke facing legal battle over Marbella development


But problems began when planners decided that only two villas could be built on the site, rather than the 30 the jv partners had envisaged.

Laing O'Rourke agreed to pay nearly ВЈ22m for the plot, to be paid in stages. But it withheld the latest instalment of ВЈ3m as it became aware that the planners' decision meant the development was no longer commercially viable.

Several more instalments are due until 2011.

Magnier’s companies intend to request a “cease trade” order – Ireland’s equivalent of a winding-up order – if the payment they claim they are owed is not made within 21 days.

A Laing O'Rourke spokesman said: “The Laing O’Rourke Group confirms it will be providing in full for the €3 million loan due from its subsidiary, Explore Investments [No 2], following a judgment entered against that company by an Irish court. This provision will have no material effect on the group’s trading results for the year. Explore Investments [No 2] has no interests other than an investment in a single project in Spain.”

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