Shelbourne Development, the property group headed by Irishman Garrett Kelleher that hopes to build one of the world's tallest buildings in Chicago, has countersued Bank of America, claiming the financial institution "willfully and wantonly" engaged in a systematic pattern of deception and unfairness in its dealings with it.
Bank of America initiated legal action against the developer and his company during the summer, alleging failure by Shelbourne to make repayments to loans that were to be partly used to progress ambitious plans for the $2bn (€1.3bn) Spire building in the 'Windy City'. Although, foundation work started on the 150-storey, 2,000-feet-high building, construction was halted last year following the downturn. Some of the development work had been part-financed by now nationalised Anglo Irish Bank.
In court documents filed in the US and seen by the Irish Independent, Shelbourne Development has retaliated against Bank of America, accusing the financial institution of attempting to profiteer by incorrectly calculating the interest rate it applied to loans and credit facilities totaling up to $10m granted to the firm.
It also denies Bank of America's claim that no interest repayments on the loans and facilities were made between November 2008 and August this year.
Bank of America has alleged that Shelbourne Development breached the loan agreement when it failed to provide, by November 1 last year, evidence of the availability of a facility for the purposes of financing its development and construction of the Spire.
Shelbourne has conceded in court documents it did not secure that commitment, but argues that Bank of America should be temporarily barred from relying on a single alleged failure to comply with a non-monetary covenant as a basis to declare default or accelerate the loan, as well as from seeking judgments or remedies of any kind against Shelbourne.
Shelbourne has said that its failure to secure the necessary financial facility by last November was a direct result of the "unforeseeable and unprecedented economic downturn and recession", and points to the fact that Bank of America itself required $45bn in Federal funding to maintain its business.