McKillen's pyrrhic Nama victory
THE closer the scrutiny to which it is subjected, the more developer Paddy McKillen's Supreme Court "success" in his battle with the National Asset Management Agency (Nama) looks like a pyrrhic victory.
While the Supreme Court ruled that Nama's decision to transfer the developer's €2.1bn of loans from the Irish-owned banks in advance of the new body being legally established was legally invalid, there seems to be nothing in the decision to prevent Nama -- now that it has been legally established -- from going ahead and acquiring McKillen's loans from the Irish banks.
When the original High Court case was being heard last October, perhaps the most telling point made by Attorney General Paul Gallagher was that, despite the draft Nama Bill having been published in early 2009, McKillen had not moved to refinance any of his loans with the Irish-owned banks.
Gallagher also pointed out that, while McKillen was still paying the interest on all of his loans, several of them were overdue for repayment.
Depending on the conditions attached to each individual loan, that could legally constitute a default in some cases, argued the Attorney General.
Even more important than the legal niceties of the case is the doleful fact that the position of the Irish banks has continued to worsen since last October.
With four of the six Irish-owned banks now majority state-owned and a fifth institution -- Bank of Ireland -- almost certainly headed in the same direction, McKillen would be well-advised to distinguish the apparently favourable legal trees from the distinctly unfavourable banking woods.
Sunday Indo Business