NIB gets €8.87m judgment over Paddy Kelly guarantor
Published 24/07/2010 | 05:00
NATIONAL Irish Bank (NIB) is entitled to judgment for €8.87m against financier Niall McFadden over personal guarantees he gave on an overdraft facility for a company of developer Paddy Kelly's, a judge has ruled.
NIB had last August secured summary judgment orders for €8.5m against Mr Kelly and businessman Paul Pardy over their guarantees for the same overdraft facility for RQB Ltd (formerly known as Redquartz Boundary Ltd).
Some €12m had been made available to RQB for the purpose of acquiring properties "pending injection of investor equity". The bank secured judgment against the company itself in September 2009. RQB Ltd is now in liquidation.
Mr McFadden, a director of RQB from 2005, had argued the bank was not entitled to judgment against him, and that case went to a full hearing before Mr Justice Brian McGovern.
In his judgment yesterday, Mr Justice McGovern rejected Mr McFadden's claims that he was not bound by a personal guarantee provided by him in December 2005 and ruled that the bank was entitled to judgment.
The central issue was whether the December 2005 guarantee had been replaced by another guarantee of September 2008 and, if so, whether Mr McFadden was bound by that later guarantee. Mr McFadden argued that the 2005 guarantee had been replaced and any liability he had was under the 2008 guarantee.
The judge said he accepted that NIB had agreed the 2008 guarantee would supplant the 2005 guarantee, but only when the restructured facilities had been drawn down. As they never became operative, the 2005 guarantee remained in place and Mr McFadden was bound on foot of that guarantee, he ruled.