The Anglo Irish Bank has pulled out of a loan deal with one of the most exclusive of New York’s hotels, accepting a discount of $100 million on the loan in order to extricate itself from the deal. The $300 million loan deal connected to Manhattan's luxury Mark Hotel was sold for just $190 to Dune Real Estate Partners investment firm.

 

 

Despite the sale, the heavily indebted hotel remains tangled in a complex legal case with Anglo Irish. Legal proceedings against the bank were brought by developers Izak Senbahar and Simon Elias in early 2011. The developers claim that Anglo Irish breached a $500 million loan deal between them that was supposed to fund the redevelopment of three hotels in Manhattan; the Mark, Flatolel and Alex. They argue that Anglo should not be allowed to sell the loans to a third party, and are demanding $1 billion in damages.

The loans relating to the Alex and the Flatolel had already been sold on, and now the last of the three was resold this week.

 

Anglo Irish has been struggling to disengage itself from a number of loan deals related to troubled real estate investments in recent months. They are also facing legal proceedings in Ireland, in a $50 million deal related to two separate Manhattan hotels. This lawsuit, brought about by a Dublin-based investor, is seen as a test case by another 23 investors also considering action against the bank.

It looks like troubled times ahead for the bank as it attempts to wash its hands clean of financing deals it has obviously come to regret.