Thursday 27 April 2017

Developer says extradition warrant to US over insurance deal is 'surreal'

Garrett Kelleher
Garrett Kelleher
Shane Phelan

Shane Phelan

A US court has issued a warrant for the extradition and arrest of Irish real estate developer and businessman Garrett Kelleher.

A court in Philadelphia charged Mr Kelleher, best known as the former backer of the Chicago Spire, with criminal contempt after he did not comply with orders to appear in court as part of a long running insurance dispute. The warrant was issued to the US Marshals Service and the US government on St Patrick's Day.

Mr Kelleher, who is currently in Ireland, described the development as "surreal" and told the Irish Independent he did not believe the US court had jurisdiction to get involved in the dispute, which involves companies in Liberia and the Cayman Islands.

The Dublin-born businessman found himself at the centre of the row after he agreed to fund litigation against an insurance firm.

The matter has its roots in the ransacking of stores and warehouses owned by Abi Jaoudi & Azar Trading (AJA) during the Liberian civil war in 1990.

AJA subsequently made a claim against its insurer, Philadelphia-headquartered Cigna Worldwide Insurance, but it refused to pay out, insisting the firm had missed a cut-off point for claims.

Cigna was subsequently sued in Philadelphia but the insurer won the case in the US Circuit Court of Appeals.

However, a judgment for $66.5m (€61.5m) was secured against Cigna in the Liberian courts in 1998.

But Cigna then obtained an anti-suit injunction in Philadelphia in 2001 blocking efforts to enforce the Liberian judgment anywhere in the world.

Mr Kelleher became involved after a business associate, Canadian-Irish asset recovery expert Martin Kenney, took an interest in the case in 2005.

He persuaded Mr Kelleher to invest in a lawsuit seeking to enforce the Liberian judgment against Ace Ltd, a Cayman Islands company which bought Cigna. Mr Kelleher pumped $2.85m (€2.6m) into the lawsuit via a Maltese company.

The US District Court in Philadelphia found this violated the 2001 injunction and ordered both Mr Kelleher and Mr Kenney to appear at a costs hearing last December.

Neither attended, sending their lawyers instead, and arrest warrants were issued for both men last week. Mr Kelleher said: "I would have had nothing to say to the court. I don't believe and have been advised they don't have jurisdiction."

He said he had also been advised the issue effectively amounted to a misdemeanour and that a number of decisions made in the case would be "robustly appealed in the appropriate forum".

Irish Independent

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