Archive for October 29th, 2012

He may be down, but he’s not out.

Having lost a marathon court battle with the billionaire Barclay brothers in London’s High Court this year, having giving NAMA a bloody nose in a judgment which was ultimately reversed in a superior court and amid recent reports that he now faces a legal fees bill of €25m, you might have thought you had heard the last of Paddy McKillen.

But he’s back!

Today the British Court of Appeal granted leave to Paddy to appeal against the decision by British High Court judge, Judge Richards on 10th August 2012 which saw Paddy comprehensively lose his challenge to David and Frederick Barclay buying €800m of loans from NAMA that are secured on the Maybourne group of London hotels – Claridge’s, the Connaught and the Berkeley – a loss to Paddy that might enable the Barclays to foreclose on the loans and deprive Paddy of control over the hotels. In addition, the British High Court decision bizarrely concluded that the Barclays’ acquisition of loans secured by Derek Quinlan’s shares in the Maybourne group didn’t constitute a disposal of Derek’s shares which would have given rise to Paddy having first right of refusal on Derek’s shares. As things stood before today, Paddy’s prospects for keeping control over the hotels were not looking good.

But the appeal offers a ray of hope to the Belfast-born developer and businessman. The appeal court has directed that the matter be heard within five weeks because it “concerns the entitlement to a significant stake in the ultimate owner of very substantial assets “ and because “of the owner’s financial circumstances” The consent for the appeal refers to Paddy’s skeleton arguments but these are not available on here at present. The NAMA angle in this case appeared to have been settled in June 2012 when the UK’s appeal court held that NAMA’s disposal of the loans was not in breach of the assigned contractual agreement relating to the loans, but absent the skeleton argument, we don’t know if the NAMA involvement might be re-opened. Paddy hasn’t apparently reacted to the recent news that NAMA’s asset manager Paul Hennigan – who along with John Mulcahy, gave evidence at the marathon High Court hearing this year – apparently shared an offer from a Malaysian concern named Wynton with the Barclays’ representative.

Back in 2010, Paddy comprehensively lost his challenge to NAMA in Dublin’s High Court where he was trying to stop the Agency acquiring his loans. But that comprehensive loss was turned into a score-draw with an appeal by Paddy to the Supreme Court and given NAMA’s subsequent decision to not acquire most of Paddy’s loans and to pay his legal expenses, you might regard Paddy’s outcome from his battle with NAMA in the Irish courts as a victory. No doubt, Paddy will now be hoping for the same pattern to be reproduced in the British courts.

The British Court of Appeal decision today is available here.

Read Full Post »