Bank of Queensland was open to lending on commercial construction projects in the United States to cater to the finance needs of one of its best customers, or so that customer asserts in a case lodged with the Supreme Court of Queensland.
The Mulhern Group is seeking A$18 million in compensation from the bank, following the appointment of receivers to the firm in May 2010, the
Courier Mail reports.
The group is one of the four large exposures responsible for a surge in bad debt expense at BOQ.
Mulhern borrowed as much as $57 million from the bank in a banking relationship that dates back to the 1990s, when the client's principals, Richard and Jacqueline Mulhern, emigrated from Ireland. BOQ became their sole banker in 2006.
The offer by BOQ of a loan of $5 million to cover a US property development was made at the time the Mulherns moved to New York in 2007, the newspaper reports.