A legal challenge initiated by businessman Paddy McKillen jnr disputing liability for an alleged €2.1 million debt could stall separate bankruptcy proceedings against him.
In proceedings filed this week in the High Court, McKillen jnr claims that a December 2022 facility agreement between Cool Dust Limited, himself and Herbert Street Finance unlimited company (HSF) is void and unenforceable and no sum is due by him to HSF.
Among various claims, he alleges HSF did not have authorisation under the Central Bank Act to enter into any such agreement and, as a result, a guarantee and indemnity executed by him in December 2022 is void and/or unenforceable.
In other claims, it is alleged McKillen jnr has been wholly or partially discharged from his obligations under the guarantee and indemnity due to material alterations to the facility agreement made without his knowledge or consent, including the application of funds received from third parties without his consent and alleged transactions/dealings of which he was unaware.
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His proceedings come just weeks after the High Court heard he intended to challenge HSF’s bid to bring bankruptcy proceedings against him over the alleged debt.
McKillen jnr’s proceedings include an application for an injunction putting the bankruptcy proceedings, listed for mention on April 13th, on hold pending the outcome of his case. He is also claiming damages on grounds including the bankruptcy proceedings are an abuse of process and for alleged breach of contract.
Other orders sought include to have the dispute sent to mediation.
When HSF’s application was mentioned before Judge Liam Kennedy earlier this month, he was told McKillen jnr denies he is indebted to HSF in any sum exceeding €20,000.
A bankruptcy summons, the first step in bankruptcy proceedings, was issued in late January by HSF. It alleged, unless McKillen jnr paid the €2.1 million sum, he would have committed an act of bankruptcy – unless he applied to have the summons dismissed on the grounds he was not indebted to HSF in any sum, or only in the sum of €20,000.
HSF claimed in its proceedings the €2.1 million debt arose on foot of McKillen jnr covenanting to pay on demand the obligations of Cool Dust Ltd to HSF up to a maximum €3 million.
It claimed sums of €2.3 million were received in part payment of Cool Dust’s obligations but about €2.14 million remained due and owing, plus daily interest.
Barrister Keith Farry, for McKillen jnr, of Torquay Road, Foxrock, Dublin, told the High Court in early March he was seeking to set aside the summons. This matter would be “fully contested”, counsel said.
Barrister Niall Ó hUiginn, for HSF, said he was very anxious to get the matter on.
Kennedy adjourned the bankruptcy matter for mention on April 13th when a hearing date for the set-aside application was expected to be fixed.
McKillen jnr has been the figure behind many of Dublin’s most significant entertainment and dining venues over the past 20 years.
Founded with his old schoolfriend Matt Ryan, McKillen jnr’s Press Up grew fast by developing its own restaurants and existing, successful operations including Wagamama, Elephant & Castle and Wowburger.
At one point, it had more than 2,000 staff across 50 venues, but by September 2024, Cheyne Capital had taken a majority stake in the business, later renaming it Eclective Hospitality Group.
