US Spire developer sues Nama over Chicago loan row
Published 07/08/2015 | 02:30
The developer behind the planned Chicago Spire has taken a court action against Nama over the attempted enforcement of personal guarantees and other loans tied to the development.
Lawyers for Garrett Kelleher and his company, Shelbourne North Water Street, have filed papers with US bankruptcy court in Illinois against Nama and debt management firm Capita after Capita attempted to collect loans worth $8.1m from Mr Kelleher.
Mr Kelleher is seeking a declaration that he and his company have been released from those loans. He is also seeking punitive damages as a result of Capita and Nama's "wilful violation of the releases".
Shelbourne North Water Street, borrowed $54m for the deal from Anglo Irish Bank in 2006. Those loans ended up in Nama and were bought by US investor Stephen Ross through his property firm, Related Companies.
Shelbourne North Water Street ended up in bankruptcy protection with debts of around $80m. The tower has never been built.
Last year the Chicago bankruptcy courts signed off on an exit plan after Shelbourne North Water Street, and its partner, Atlas Apartment Holdings, said they had a conditional commitment letter from Stonebeck Capital, a New York-based commercial property financier, to fund a reorganisation plan.
That exit plan was based on $135m being paid to Related last October. That deadline was not met however and Related took over the site.
Mr Kelleher and Shelbourne North Water Street contend that as part of the agreement with Related, they were released of all claims and demands, including personal guarantees, tied to the Chicago Spire once that October deadline passed.
However the court filing claims that after that, "in its capacity as a loan servicer for [Nama subsidiary] NALM, operating under the direction of Nama, Capita has attempted to collect from Kelleher claims totalling not less than $8,060,999.51".
Mr Kelleher and Shelbourne believe those claims should already have been released.
In the filing, it is claimed that Mr Kelleher spoke with a senior Capita employee who "confirmed that the loans... that are the basis for the NALM/Capita Claims were business loans for the purpose of the development of the Spire and not personal loans to Kelleher".
Even so, Capita has continued to pursue the loans, it is claimed.
Mr Kelleher was one of the most high profile developers and property investors during the boom through his Shelbourne operations.
He also expanded out of property into movie making, chairing Hollywood producer Lightstream Films. The firm recently secured over $20m in Chinese backing for one of its movies.
He helped produce the slick crime thriller 'Rampart', starring Woody Harrelson. He has been involved in the movie financing game, since helping raise money for the Mel Gibson box office hit 'The Passion of the Christ' in 2004.
The Dubliner is also closely involved in Irish football, having bought St Patrick's Athletic during the boom.