McKillen challenge to IBRC sale of loans to be heard in March
IBRC liquidators ‘caught in crossfire’ between McKillen and Barclay brothers
In an affidavit, property investor Paddy McKillen said it was necessary to bring his action, aimed at preventing Irish Bank Resolution Corporation selling €246 million of his loans, “to protect my commercial interests and my constitutional rights relating to property”. Photograph: Yui Mok/PA Wire
The legal challenge by property investor Paddy McKillen aimed at preventing Irish Bank Resolution Corporation selling €246 million of his loans to the billionaire Barclay brothers has been fixed for hearing next March.
The High Court heard that noon tomorrow is the deadline for any initial bids for the loans of the Belfast businessman to be lodged with the special liquidators of IBRC.
A final decision on the winning bid is expected to be made next March but, if the Barclays are the selected bidder, Mr McKillen’s challenge will be heard before any sale is effected.
If Mr McKillen wins his case, the liquidators have said they will abide by the court’s decision. Subject to the Barclays winning the bid, the case will open on March 4th and is listed for six days.
Today, Cian Ferriter SC, for the liquidators, told Mr Justice Paul Gilligan the stage two bidding process for the loans will begin next month and his clients are anxious the litigation should not have an impact on the loans sale process. The liquidators were effectively caught in “the crossfire” in the bitter battle between Mr McKillen and the Barclays and appeared to have been joined to the case purely to ensure any orders granted to Mr McKillen could be put into effect, Mr Ferriter added.
Michael Cush SC, for Mr McKillen, agreed his client’s dispute was with the Barclays and said the sides had agreed the injunction’s application did not need to proceed now as the sides had agreed on an early full “telescoped” hearing next March.
Mr Cush also said that because there would be an early full hearing he was not now seeking to join the State to the case for the purposes of challenging provisions of the IBRC Act which, he said, make it very difficult to get injunctions against the bank.
The Irish proceedings come after Mr McKillen last month lost the final stage of his £20 million UK court battle against the Barclays for control of three luxury hotels in London – Claridge’s, the Connaught and the Berkeley.
Mr McKillen’s concern is to ensure whoever buys the loans does so on the basis of renegotiated terms and conditions related to those loans. He contends the personal loans tranche cannot be treated as anything other than loans of a fixed three-year period from December 2012.
In an affidavit, Mr McKillen said it was necessary to bring the action “to protect my commercial interests and my constitutional rights relating to property”. A good faith provision in the shareholders’ agreement of the London hotels’ holding company – Coroin Ltd – meant the IBRC liqudators should not accept an offer from the Barclays, he said.
l Separately today it emerged that an action by the Hickey pharamacy group and its owner Patrick Hickey aimed at preventing their loans valued at up to €45 million being included in a portfolio of €900m loans offered for sale by the liquidators of IBRC will be heard next month.
The Hickey side claims its loans are fully performing and the sale of them as part of a larger portfolio or their possible transfer to the National Asset Management Agency would be “disastrous” for the Hickey group and its workforce of 300 people.
Their own offer to buy them for €40 million had been rejected, they said. Their concern is the loans may be sold to a person or entity such as a foreign private equity fund “not interested in maintaining a long term banker/customer relationship” or, if the €900 million portfolio was not sold, all those loans would be moved into Nama to the detriment of the Hickey side and contrary to the group’s business plan.