Michael Flatley Faces Legal Battle Over Castlehyde Mansion Loan

Feb 27, 2025

Michael flatley, famed Lord of the Dance star, is embroiled in a legal dispute concerning his Castlehyde mansion in Fermoy, Co Cork, Ireland. The core issue revolves around a €5.6 million loan taken out by his Blackbird Film Productions Ltd in 2023 and whether Flatley defaulted on the loan payments.

The Loan and Alleged Default

The loan, provided by Novellus Finance Ltd, stipulated monthly repayments of €67,000 over two years. Novellus claims a default occurred, a claim Flatley disputes. flatley guaranteed the loan using his Castlehyde mansion as collateral, leading Novellus to appoint a receiver over the property due to the alleged default.

Court Proceedings and Proposed Resolution

In Commercial Court,Flatley’s counsel stated that Flatley is “ready,willing and able” to pay off the entire loan,amounting to over €6 million,including accrued interest. Flatley’s legal team sought to adjourn a hearing where he is seeking an injunction to prevent the receiver from taking further action, proposing to settle the outstanding amount.

Flatley also agreed “under protest” to place a disputed sum, covering legal and receivers’ costs, into an escrow account. His counsel stated that nearly €1 million in arrears had already been paid, arguing that the loan was no longer in arrears. “I can’t understand why they won’t accept it. Michael Flatley has shown bona fides and nearly €1 million of arrears has been paid,” stated Ronnie Hudson, Flatley’s counsel.

Novellus’s Perspective

Novellus’s counsel,Kelley Smith SC,argued that they had not received a loan facility and viewed the offer as “another attempt to put off the evil day.” She added, “Frankly, it comes too late.” Ms. Smith also noted that in September 2024, Flatley allegedly lacked the funds for the €67,000 monthly payment, dismissing the claim that Blackbird was wrongly forced into default as “all smoke and mirrors.”

Court Decision and Future Implications

Mr. Justice Mark Sanfey proceeded with the injunction hearing,stating that a hearing could not be delayed based solely on an assertion. He acknowledged the payment of arrears but emphasized that they where “dwarfed by the redemption sum.”

The outcome of the injunction request is crucial, as Flatley intends to refurbish and reside at Castlehyde. Losing the application could result in the property being possessed and marketed by the defendants.

Escrow Accounts: A Common Tactic in Real Estate Disputes

The use of an escrow account, as proposed by Flatley, is a common practice in real estate disputes.It involves a neutral third party holding funds until the resolution of a disagreement. This ensures that the money is available when a settlement is reached or a court order is issued, providing security and demonstrating good faith. In this case, placing the disputed amount into escrow could perhaps influence negotiations and demonstrate Flatley’s commitment to resolving the financial issues.

Understanding Receivership in Property Law

The appointment of a receiver is a meaningful legal action often taken by lenders when a borrower defaults on a loan secured by property. A receiver is a court-appointed individual or firm tasked with managing the property and its income for the benefit of the lender. Their powers can include collecting rent, managing expenses, and ultimately selling the property to recover the outstanding debt. Flatley’s fight against the receiver appointment highlights the high stakes involved and the potential loss of control over his valuable asset.

Conclusion

The legal battle surrounding Michael Flatley’s Castlehyde mansion highlights the complexities of high-value loans and property disputes. Flatley’s offer to fully repay the loan underscores his desire to retain the property, while novellus’s skepticism suggests deeper issues at play. The court’s decision on the injunction will significantly impact the future of Castlehyde and Flatley’s plans for the estate. Stay tuned for further updates as the case progresses.