Sunday 20 October 2019

US court dismisses Kelleher's €1bn case against Nama

Judge rules that court has no jurisdiction over Irish agency

Hollywood actor Liam Neeson and his late actress wife Natasha Richardson – pictured with developer Garrett Kelleher – were enlisted to attend a glitzy launch for the initial project over a decade ago
Hollywood actor Liam Neeson and his late actress wife Natasha Richardson – pictured with developer Garrett Kelleher – were enlisted to attend a glitzy launch for the initial project over a decade ago
John Mulligan

John Mulligan

Irish developer Garrett Kelleher has seen a $1.2bn (€1.05bn) case his firm took against the National Asset Management Agency (Nama) dismissed by a US court.

The judge overseeing the case agreed with the agency that Nama could not be subject to the jurisdiction of the Chicago court in the case. A Nama spokesman said the agency was pleased with the outcome.

A company owned by Mr Kelleher had sued Nama in the high profile case related to the planned Spire project in Chicago. His firm had alleged that Nama had ruined his chances of successfully developing what would have been a landmark residential scheme.

The Irish Independent revealed last year that a US asset management firm had claimed in court papers in the case that former Taoiseach John Bruton had agreed to act as a liaison between it and Nama while the US firm tried to buy loans linked to the 116-storey Spire project. Mr Bruton denied the claim. Mr Kelleher's plans to develop the Spire in 2007 and 2008 coincided with the global economic meltdown.

The building was to feature about 1,200 exclusive apartments. Liam Neeson and his late wife Natasha Richardson were enlisted to attend a glitzy launch for the project.

The initial development of the scheme, with construction of foundations having begun in 2007 but halted in 2008, was bankrolled by Anglo Irish Bank to the tune of $69m (€61m). With interest, the amount owed later topped $90m (€79m). The Anglo loans had been personally guaranteed by Mr Kelleher. His Shelbourne companies had already injected $225m (€198m) of equity into the Spire project.

At the time, companies owned either directly or indirectly by Mr Kelleher owed about $510m (€450m) of debt to Anglo, which he had personally guaranteed either all or part of.

His companies owned an additional $600m to Irish banks. But in 2013, Nama offered the Chicago Spire loans for sale and eventually sold them with Mr Kelleher's personal guarantees still attached, the US court heard.

A lawyer for Mr Kelleher's Shelbourne North Water Street Corporation told the Chicago court last year in the case against Nama that continuing the development of the Spire would have been the most economically advantageous way for Mr Kelleher's Shelbourne companies to pay back money owed to banks.

Shelbourne North Water Street Corporation claimed that, at the time of loan sale, it had the contractual right and the ability to buy those loans at par. It claimed that Nama improperly prevented it from redeeming its loans.

Nama and the National Asset Loan Management, which was also sued by Mr Kelleher's company in the case, contended that because they are agents of a foreign state, they are immune from prosecution in the US under the Foreign Sovereign Immunities Act.

Irish Independent

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