Quest for the Truth and Justice

Diamond Bank seeks sale of Princess Luxury hotel over alleged loan default

Posted by on Mar 30th, 2017 and filed under News, Top Stories. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

The management of Diamond Bank has sought leave of an Ilorin High Court to sell a popular hotel, Princess Luxury, located along  Pipeline road, in Ilorin, the Kwara state capital, over alleged failure to pay an outstanding N159 million loan with accumulated interest at N45.9 million.

The bank claimed that the hotel complex had been used as collateral for the initial loans of N120 million and N50 million granted the facility, saying that it was later restructured into two facilities of N159 million and N29.9 million for convenience of payment.

In papers before the court, the bank, through its counsel, Dr. Kayode Olatoke (SAN) told the court that it had been magnanimous enough with the hotel, but the hotel had not treated her fairly by their refusal to pay up the outstanding of the loan.

The Senior Advocate of Nigeria (SAN) consequently sought the leave of the court foreclosing right of redemption of Princess Luxury Hotel on the mortgage property as well as an order of the court permitting the bank to sell the hotel complex located along Pipeline road, Tanke being mortgaged by the hotel in favour of the bank the six plots of land at New GRA, Budo Osho all in Ilorin.

However, the hotel was insisting that the figures touted by the bank were illegal and the bank should be stopped from selling off the property. According to papers filed before the court, by counsel to the Princess Luxury, Rafiu Balogun, the hotel was claiming that there is no “valid third party legal mortgage between the hospitality outfit and the bank. The hotel, which is claimant in the case therefore prayed the court to stop the bank from interfering with the hotel and refund the sum of N45.9 million it claimed was illegally deducted from its accounts as interest and charges.”

Other reliefs sought by the hotel include, “A declaration that the defendant cannot exercise the right of sale entrenched in the third party legal mortgage, when the outstanding loan or indebtedness of the hotel to the defendant has not been ascertained.”

“A declaration that it is inequitable to continue to charge punitive interest on the monthly payment due, to the economic downturn as it affects the sales from the hotel upon which the payment is sourced and the defendant ought to consider interest waiver in the circumstance.”

“Perpetual injunction restraining the defendant from exercising the right of sale in respect of the purported legal mortgage or take any step towards recovering the loan, except when further restructuring of the loan is carried out and claimants deliberately refuse to pay the outstanding indebtedness from the proceeds of the sales of accommodation and  restaurant among other businesses as detailed in the existing offer letter of May, 2015.”

The trial judge, Justice Sulyman Akanbi however adjourned the case till May 2, 2017 for mention.

Leave a Reply