McKillen seeks court order restraining IBRC

Judge says it is ‘fair and right’ that McKillen be permitted to challenge proposed sale of €246m in loans

Property investor Paddy McKillen will ask the High Court this week for orders restraining Irish Bank Resolution Corporation selling certain parts of his loan portfolio with the liquidated bank to the Barclay brothers.

In an affidavit, the Belfast businessman said it was necessary to bring legal proceedings here “to protect my commercial interests and my constitutional rights relating to property”.

Mr McKillen last month lost the final stage of his £20 million London court battle against the billionaire Barclay brothers over control of three of the city's finest luxury hotels – Claridge's, the Connaught and the Berkeley.

Mr Justice Paul Gilligan today granted an ex parte application by Michael Cush SC, for Mr McKillen, for leave to bring proceedings against IBRC over the proposed sale of some €246 million in loans of Mr McKillen. It was "fair and right" that Mr McKillen should be permitted to bring that challenge, the judge said.


Mr Cush said the purpose of those proceedings was not to stop the sale of the €246 million personal loans tranche but rather to ensure whoever took on those loans did so on the basis of the renegotiated terms and conditions related to those loans.

The judge also permitted counsel to serve short notice on IBRC of his intention to apply tomorrow for an injunction restraining IBRC selling loans to the Barclay brothers.

Mr McKillen contends a good faith provision in the shareholders' agreement of the London hotels' holding company – Coroin Ltd – means he is entitled to stop the IBRC liquidator accepting an offer from the Barclays.

In an affidavit, Mr McKillen said he wanted an order preventing IBRC treating the personal loans tranche as anything other than loans of a fixed three-year period from December 2012. Any transfer of the loans must reflect that, he said.

Mr McKillen said he had been a customer of IBRC, formerly Anglo Irish Bank, for more than 20 years and has numerous performing loans including loans of €241 million relating to his interest in the Jervis Street car park, Dublin; loans of €308 million relating to his interest in properties in Doncaster and personal loans amounting to more than €246 million secured by a charge on certain assets including shares in Coroin Ltd, he said.

He said, following the banking crisis, he sought to protect his position and that of his associated businesses and enterprises by ensuring the Doncaster, Jervis Street and personal loans could not be called in, which would mean he would be left without credit facilities.

He engaged with the bank and entered talks to extend the entirety of his loans, including the personal loans, by three years “so that my business could withstand the turbulent economic and banking climate”.

The bank was very anxious to retain him as a customer and had resisted strongly attempts by Nama to acquire his loans, he said.

A complex “jumbo” refinancing was proposed and, between April and June 2012, the bank was in almost daily contact with him with the express intention of completing that.