Nama argues McKillen hotel debt claim 'nonsense'
PROPERTY DEVELOPER Patrick McKillen’s declaration that £660 million (€826 million) worth of debt on three London hotels could have been refinanced if more time had been given is “nonsense”, the National Asset Management Agency has argued.
In the high court action in London, Mr McKillen’s legal team argued that Nama had acted unlawfully when it sold £660 million worth of debt secured on Claridge’s, the Berkeley and the Connaught to the billionaire Barclay brothers.
The Belfast-born property developer argues that Nama gave just 52 minutes’ notice to the shareholders of the hotels’ holding company, Coroin, that it was selling the debt at par value to a Barclay-controlled company.
Robin Dickers QC, appearing for Nama, said Mr McKillen argued that a new lender could have been found if Nama had given 28 days’ notice, but Mr Dickers argued that this was “essentially nonsense”.
“The company had no prospect of being able to refinance the loans within 28 days,” he said, adding that anything Coroin had wanted to do or say should have taken place before the sale on September 28th last year.
Following 30 days in open court and months of pretrial hearings, the McKillen case – which is expected to cost millions in legal fees – reached its end yesterday.
A judgment is expected before the legal summer recess.
Nama’s closing submission, Mr Dickers told Mr Justice David Richards, bore “an uncanny resemblance to our written opening submissions”.
“That is because little changed during the course of the trial,” Mr Dickers said, adding that Nama could never have hoped to do more than to recover the full value of the debt.
“If the loans were not sold, they were due to go into default three days later on 30th September, 2011. It is something that the company had known for many months,” he said.
“The question then is, what in these circumstances was there to discuss? What could the company have said that might have influenced Nama not to sell the loans?
“What alternative could it have offered Nama? What was it the company could have said that might have persuaded Nama to take some other course?”
On the day the debt was sold, Mr Dickers said, Coroin was unable to identify what it wanted to say to Nama. “All it ever said was it would like two weeks to get its head around the offer.”
He acknowledged that Nama had not believed on the day the sale went through that there was any prospect of an alternative offer to buy the debt emerging from Coroin.
“It is certainly true that no one expected that to happen. Our submission in relation to that is that no one expected it to happen because there was no reasonable prospect of it happening.
“It was not that no one expected it to happen because Nama were going in essentially with their fingers in their ears and their eyes shut, refusing to listen to whatever the company had to say if it came up with anything. This was not a situation in which Nama was going in with a closed mind. They would have listened if there had been anything to listen to,” Mr Dickers said.
However, Richard Hill QC, appearing for Mr McKillen, said Nama had been drawn into the legal action because it had presented Coroin with a fait accompli.
“We would say it is extremely difficult, if not impossible, to see how under any circumstances the consultation period would not be measurable in a considerable number of days rather than hours, and certainly not less than an hour,” he said.
“Consultation must be sufficient to allow the company to consider its position, take advice and give a considered response, and then for Nama in turn to consider that response with a receptive mind.”