Paddy McKillen junior is in a dispute with receivers who took possession of three valuable Dublin office properties, allegedly due to millions of euro in rent arrears on them.
Perfect Stripe Ltd, trading as Grafter, is suing Ken Fennell and Brendan O’Reilly, of Interpath Advisory, who were appointed joint receivers over three companies which rented the properties at Stephen’s Green, Leeson Street and Ely Place from Perfect Stripe. The three companies, Wonderbay Ltd, Crossville Properties Ltd and Discovery Dawn Ltd (all in receivership) were McKillen group-related firms.
Perfect Stripe claims that on the morning of June 23rd, agents of the receivers broke into the properties having unlawfully purported to have forfeit the leases. The locks were changed and Perfect Stripe and its agents were prevented from gaining access.
The claim of breaking in is denied.
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The purchase of the buildings was funded largely through loans from RELM Loan Opportunities DAC, which appointed the receivers after calling in the loans.
Perfect Stripe says the forfeiture happened despite discussions with the defendants about rent adjustments. It believed the parties were negotiating in good faith and that no steps would be taken towards any enforcement until those negotiations concluded.
The defendants claimed the sums due on each of the properties in rent arrears at the time was some €2.7 million for Stephen’s Green, around €321,000 for Ely Place and some €530,000 for Leeson Street.
Perfect Stripe, in its statement of claim, says the defendants have unlawfully forfeited the properties “under the guise of seeking inflated amounts in excess of the interest due” under the loan agreements. It also says they have “misappropriated the plaintiff’s business in order to achieve a higher sales price for the properties”.
On Monday, Mr Fennell and Mr O’Reilly, in their capacity as receivers of the three defendant companies, applied to have the dispute admitted to the fast track Commercial Court.
James Doherty SC, for the defendants. said the total debt now due in arrears was in excess of €4.1 million and the leases were forfeited and possession taken some five weeks ago.
Counsel said there was mediation for a short time which was unsuccessful. The claim of misappropriation by the defendants of the business to themselves is “wholly without foundation”, he said.
Counsel also disputed a claim by Marcus Dowling SC, for Perfect Stripe, that from his client’s perspective, what had happened was the receivers agents breaking into the premises in the middle of the night.
Mr Dowling said his side was neutral on the application to admit the case to the commercial list.
Mr Justice Mark Sanfey said it was clearly a matter suitable for entry to the Commercial Court. He approved agreed directions and adjourned the matter to later this year.
