Saturday 21 October 2017

US bank sues Kelleher for $1.6m

John Mulligan

John Mulligan

Further pressure is being heaped on Dublin property developer Garrett Kelleher, with the businessman being sued for over $1.6m (€1.2m) by a lender in a fresh US lawsuit.

Mr Kelleher – whose plans to build the audacious, 2,000ft high, $2bn Spire skyscraper in Chicago have evaporated – is being pursued by Bridgeview Bank Group for an alleged breach of guaranty.

In documents just filed with an Illinois court, the bank claims that in 2007 Mr Kelleher unconditionally guaranteed payment of a loan note owed to it.

But the bank now insists that a default event has occurred in relation to the note because neither the vehicle used to borrow the money, nor Mr Kelleher as guarantor, has repaid the borrowings despite the fact they have fallen due.

The loan is attached to a non-descript office and warehouse property in Chicago that was home to a US office of Shelbourne Development, Mr Kelleher's firm.

Another financial institution, Ohio-based FirstMerit Bank, also sued Mr Kelleher last year in relation to a $1.6m loan it is owed and which is attached to the property. The building is owned by a trust controlled in part by Mr Kelleher, to which loans from FirstMerit and Bridgeview were made.

"Bridgeview has demanded payment, but Kelleher has refused and continues to refuse to pay," the bank claims in court filings.

Repayments were meant to be made in 59 monthly installments of over $11,800 each, with a final payment of approximately $1.5m.

The bank wrote to Mr Kelleher in early July, demanding payment. In that letter, the bank claimed that Mr Kelleher had failed to make payments since February 2013.

The bank warned that unless the loan was paid off in full by July 26, it would have to turn the matter over to its internal legal department to begin the litigation process.

The bank is now seeking the repayment of $1.47m in loan principal, $65,482 in interest, $113,878 in default interest from September 9. It also wants $645 in interest every day to be added to the money owed.

TRIAL

The court has set an initial hearing for the start of January. It has asked the two sides to report at that time whether there is any chance of the case being settled, and if not what the nature and length of the discovery process would be to in order to prepare the case for trial.

The latest legal blow to the embattled developer comes as he fights to reverse the sale last June of the Spire site by NAMA to billionaire Stephen Ross.

Irish Independent

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