Thursday 23 March 2017

US bank secures $5m judgment against builder Kelleher

courts

John Mulligan

John Mulligan

A Summary judgment totalling over $5m (€3.5m) has been granted against property developer Garrett Kelleher and his Shelbourne Development company in the US, piling pressure on the embattled businessman.

Bank of America secured the judgment following a two-year legal battle with Mr Kelleher, who had hoped to use financing from Anglo Irish Bank to help construct what would have been one of the world's tallest buildings in Chicago.

The judgment relates to a defaulted loan amount of just over $5.1m and an unpaid credit card bill totalling $117,000. He is also now likely to be stung for substantial legal fees.

Bank of America had sought the summary judgment in April, telling the Chicago court that Mr Kelleher and his company had engaged in a "transparent attempt" to delay repaying their financial obligations. That followed a claim lodged by the bank against Mr Kelleher and Shelbourne Development back in 2009 which originally sought repayment of the $5.1m in loans.

The bank had advanced the money to Shelbourne Development and Mr Kelleher to progress initial construction stages of the Spire in Chicago. The planned $2bn, 150-storey skyscraper was intended to be 2,000ft tall and would include lavish apartments. The project has been mothballed.

State-owned Anglo -- soon to be officially known as Irish Bank Resolution Corporation -- took control of the Spire site last year via a receiver. The bank is owed about $77m from Shelbourne Development.

In the Illinois District Court, Judge Amy St Eve said that neither Shelbourne nor Mr Kelleher had presented evidence disputing material facts regarding Mr Kelleher's liability pursuant to his guarantee of Shelbourne's indebtedness to Bank of America.

She said she was granting the summary judgment and gave Bank of America two weeks to submit a petition to the court for lawyer fees and costs. The $5.1m in loans have been racking up interest of nearly $153 a day, according to court documents.

Despite his financial woes, companies controlled by Belvedere-educated Mr Kelleher are among those generating rental income from state entities. Among them is Apollo House on Dublin's Tara Street, rented to the Revenue by Mr Kelleher's Cuprum Properties for €1.4m a year.

Irish Independent

Promoted articles

Also in Business