Friday 23 March 2018

Irish property developer apologises to US court over insurance dispute case no-show

Garrett Kelleher Photo: Pat Murphy / SPORTSFILE
Garrett Kelleher Photo: Pat Murphy / SPORTSFILE
Shane Phelan

Shane Phelan

Irish property developer Garrett Kelleher has apologised to a US court after a judge there issued a warrant for his extradition and arrest.

The developer, who is best known for his backing of the stalled Chicago Spire project, could face a fine or imprisonment after a court in Philadelphia charged him with criminal contempt last February after he failed to show up for a hearing in a long-running insurance claim dispute.

The Irish Independent has learned a lawyer for Mr Kelleher wrote to the court earlier this month asking that it "might have some mercy for Mr Kelleher and accept his apology".

New York lawyer J Joseph Bainton said Mr Kelleher was "under considerable financial pressures" and had mistakenly assumed he could leave the matter to a business associate to deal with.

Dublin-born Mr Kelleher became embroiled in the row after spending $2.85m (€2.5m) funding litigation against an insurance company arising out of an unpaid claim from the Liberian civil war.

A company called Abi Jaoudi & Azar Trading claimed against its insurer, Philadelphia-headquartered Cigna Worldwide Insurance, after its stores and warehouses were ransacked in 1990. Cigna refused to pay and won when a case was taken against it in the US courts.

A judgment for $66.5m was secured against Cigna in the Liberian courts in 1998, but the company then obtained an anti-suit injunction in Philadelphia in 2001 blocking efforts to enforce the Liberian judgment.

Mr Kelleher became involved after a business associate persuaded him to invest in a lawsuit seeking to enforce the Liberian judgment. The new case was taken against Ace Ltd, a Cayman Islands company which bought Cigna.

The US District Court in Philadelphia found last year this action was in violation of the worldwide anti-suit injunction and ordered both Mr Kelleher and an associate to appear before it last December.

However, neither of them showed up in court and they were subsequently charged with criminal contempt.

In letters to the court, Mr Bainton said Mr Kelleher had been unaware of the "no actions injunction" when he funded the litigation. The lawyer said Mr Kelleher had asked a leading accountancy firm to look into the case for him and received no warning from the consultancy firm regarding the injunction.

Mr Bainton has asked the court to schedule a conference involving counsel for the US State Attorney to discuss his client's position.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Editor's Choice

Also in Irish News