PROPERTY INVESTOR Paddy McKillen has provided no evidence to show that loans of some €2.1 billion to his companies can be repaid over a set period, the Attorney General has told the Supreme Court.
While the interest repayments on the McKillen loans are being met, the loans themselves are secured on property and there is no evidence the income from these are capable of financing repayment, Paul Gallagher said.
Mr McKillen had said he could readily refinance the loans and looked for time to do so but the loans have not been refinanced, Mr Gallagher added.
The Attorney General also said that experts for the National Assets Management Agency (Nama) had rejected claims by Mr McKillen and his experts that his interests and normal banking relationships would be adversely affected through his loans being acquired by Nama.
Nama could not be considered in isolation from the other State interventions in the context of the financial crisis and the situation was that some banks, without State intervention, would have had to close down or be taken over by foreign banks, he said.
In this climate, Mr McKillen’s previously comfortable relationship with his banks would in any event have been replaced by a far more critical monitoring of loans, Mr Gallagher said.
He would have suffered “collateral damage” as a result of the financial recession and, while that was regrettable, it was not attributable to takeover of his loans by Nama.
In deciding to acquire the loans, Nama was not obliged to consider Mr McKillen’s particular circumstances or the circumstances of any individual borrower, Mr Gallagher said.
In establishing Nama, the intention of the Oireachtas was to achieve an expeditious and efficient movement of eligible bank assets and no right to fair procedures applied in the circumstances, he said.
If there was such a right, any interference with it was minimal and proportionate to the aims of the Nama legislation.
The Attorney General was continuing his arguments opposing Mr McKillen’s appeal against a High Court decision clearing the way for Nama to acquire loans of Mr McKillen and his companies with Bank of Ireland.
The case has implications for the €2.1 billion in loans held by the McKillen companies with the participating institutions in Nama.
Nama has said it decided to acquire the €2.1 billion loan portfolio because it believed that that extent of exposure to the financial institutions participating in Nama created a “systemic risk” to the relevant institutions.
A central issue in the appeal is Mr McKillen’s claim that the loans acquisition decision of December 2009 breached his right to fair procedures in not affording him an opportunity to make representations on matters which affected his constitutional rights, including to property and to earn a livelihood.
He argues that before the decision to acquire, Nama had an obligation to engage in a qualitative assessment of the loans and to consider issues including the geographical spread of his property portfolio and whether or not the loans were impaired.
If those arguments are rejected and the court finds the Nama Act 2009 does not provide for a right to fair procedures, he claims the relevant provisions of the Act are unconstitutional.
The appeal has been adjourned to tomorrow before the seven-judge court.
