Kelleher 'net worth' €500m to 'zero' in six months
GARRETT Kelleher, the movie-making developer who hoped to build North America's tallest tower, saw his estimated net worth fall from €500m to zero within just six months of the State bank guarantee.
Internal Anglo Irish Bank documents reveal that the State-owned bank relied heavily on its own unvouched net worth estimates for developers such as Kelleher, Bernard McNamara and Derek Quinlan when reassuring the State that it was not already a busted flush in the run-up to the bank guarantee.
Kelleher's inflated net worth estimate was based on optimistic Anglo projections on the fortune he would make if he managed to complete and sell off the €2bn Chicago Spire. Anglo loaned Kelleher's main company, Shelbourne Properties, €300m to buy office blocks and sites in Dublin secured on a €40m personal guarantee from Kelleher.
Meanwhile, Anglo believed developer Derek Quinlan was worth €400m net on September 30, 2008 -- its financial year end and the day after the bank guarantee. But when the bank looked at his value again six months later, it believed he was only worth €66m. Within a year after that, it had estimated his net worth at zero.
Bernard McNamara was also considered mega-wealthy during the boom, but by the time of the bank guarantee even Anglo was worried that he was in trouble. The bank loaned him €310m personally on top of hundreds of millions more through joint-venture companies. The personal loans were to buy a number of properties around the Westbury hotel and also to support his construction company McNamara & Co. The bank loaned €27.9m to McNamara & Co after Bank of Ireland baulked at giving him any more money.
Anglo's security was ranked behind Bank of Ireland on McNamara & Co and the bank only had a second legal charge on his residence. Anglo was later questioned as to why it had made no specific bad debt provision in relation to McNamara in its September 2008 accounts, given his difficulties. It is not known what answer, if any, was given.
Sunday Indo Business