BURNLEY FC director Brendan Flood lost a battle at London’s Court of Appeal to protect himself against the escalating costs of his multi-million pound legal clash with a financial backer of his collapsed property business.

Flood and his former business partner James Riddell are being sued for £35million by Anglo-Irish Asset Finance plc, part of the Anglo-Irish banking group, over alleged personal guarantees for loans relating to two shopping centre developments in Wakefield and Blackpool.

The pair are defending the claim and have issued a counter claim for damages in respect of Anglo-Irish’s decision to withdraw loan facilities, which they say led to the collapse of their extensive property group, Modus Ventures, which went into administration in 2009.

They sought a court order forcing Anglo-Irish to pay £250,000 into court up front as security for legal costs of the impending trial.

However, the Court of Appeal backed a March ruling by Mr Justice Teare refusing a security for costs order.

Lord Justice Moore-Bick said evidence now showed that Anglo-Irish’s financial position has become “much stronger”.

He said the Irish Government plans to support the bank through a merger with Irish Nationwide Building Society.

He said: “In the light of the evidence as a whole, I do not think there are reasonable grounds for believing the bank will be unable to pay the appellants’ costs if called upon to do so and I would dismiss the appeal on that ground alone.”

The judge said Anglo-Irish is owed more than £200million from loan agreements to finance the developments in Blackpool and Wakefield, but Flood and Riddell’s personal guarantees are limited to £15million and £20million respectively.

Flood and Riddell maintain they were induced to enter the agreements by misrepresentations. They seek a court order rescinding the agreements or damages, and compensation for the loss caused by Anglo-Irish pulling out.

The trial is scheduled to take place in June next year.