Saturday 17 February 2018

Property tycoon Paddy McKillen to take legal action against IBRC

Paddy McKillen
Paddy McKillen

PROPERTY investor Paddy McKillen is to take a legal action against the Irish Bank Resolution Corporation (IBRC) in the Dublin High Court in a row over the sale of his loans as part of the IBRC portfolio.

The Belfast businessman, in an affidavit, said it was necessary to bring the proceedings "to protect my commercial interests and my constitutional rights relating to property."

Mr McKillen, who last month lost the final stage in his stg£20million court battle in London against the billionaire Barclay brothers for control of three of the city's luxury hotels is also to apply to the High Court in Dublin later this week for an injunction restraining the liquidator of IBRC selling a tranche of his loans to the Barclay brothers.

Mr McKillen contends a  good faith provision  in the shareholders agreement of the holding company - Coroin Ltd - which owns the luxury hotels means he is entitled to stop the IBRC liquidator accepting an offer from the Barclays.

Yesterday Mr Justice Paul Gilligan, when granting an ex parte application (one side-only represented), said it was fair and right permission be granted to Mr McKillen to institute the intended proceedings against IBRC.

Michael Cush SC, for Mr McKillen, said the purpose of the proceedings was not to stop the sale of the €246m personal loans tranche but that whoever takes them on takes on the renegotiated terms and conditions.

In his affidavit, Mr McKillen said he sought an order legally impeding IBRC from treating the personal loans tranche as anything  other than loans of a fixed three year period from December 2012 and which required reasonable notice of 24 months for any transfer or sale of them.

Mr McKillen said he had been a customer of IBRC - the former Anglo Irish Bank- for over 20 years and has numerous performing loans including loans of €241m relating to his interest in the Jervis St car park Dublin; loans of €308m relating to his interest in properties in Doncaster, UK and personal loans amounting to over €246m.

He said the personal loans remained secured by a charge on certain assets including shares in Coroin Ltd, the holding company which owns London hotels Claridge's; the Connaught and the Berkeley Hotel.

Following the banking crises, Mr McKillen said he sought to protect his position and that of his associated businesses and enterprises by ensuring  the Doncaster, Jervis Street and personal loans could not be called in in which would mean he would be left without credit facilities.

The businessman said he engaged with the bank and entered into talks for the purpose of extending the entire of his loans including the personal loans by three years "so that my business could withstand the turbulent economic and banking climate."

The bank, he said, was very anxious to retain him as a customer and had resisted strongly attempts by NAMA to acquire his loans.

A complex "jumbo" restructuring was proposed and Mr McKillen said he engaged with the bank between April 2012 and June 2012.

He said the bank was in almost daily contact with him with the expressed intention of completing the refinancing.

 The bank, he said, wished to retain him  as a borrower and made reference to the comfort it derived from the fact that "unlike many of their other significant customers I was not exposed to the Irish property market."

As part of the "jumbo" refinancing Mr McKillen said he offered and the bank accepted as further security, a hotel and a farm in Argentina. He also gave a negative pledge he would not reduce his worldwide non-IBRC charged assets below €50million and a personal guarantee.

Mr McKillen said he was informed  a formal sanction by the Bank's Credit Committee would be granted  and was delayed only because the bank was under-resourced as regards staff.  It also said it was awaiting the return of IBRC executive Richard Woodhouse who was required to give  credit committee and or board approval and was on sick leave.

When the bank went in to special liquidation last February, Mr McKillen said the jumbo refinancing on his personal loans did not go to the credit committee.

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