US court finds Irish developer in contempt over insurance claim
Chicago Spire backer Garrett Kelleher's legal bill for role in €60m claim
Garrett Kelleher: Invested $2.85m in 2006 to help Liberian group AJA to enforce a $66.5m judgment against US insurer Cigna Worldwide in return for a share of the lawsuit’s proceeds.
Irish developer Garrett Kelleher is facing a multi-million dollar legal bill after a US federal court found him in contempt arising out of his involvement in a €60 million insurance claim taken by a group of Liberian businessmen.
Mr Kelleher, best known as the backer of the Chicago Spire, invested $2.85 million in 2006 in the efforts of Liberian group Abi Jaoudi and Azar Trading (AJA) to enforce a $66.5 million judgment against US insurer Cigna Worldwide (CWW) in return for a share of the lawsuit’s proceeds.
The case failed, but the US District Court in Philadelphia, Pennsylvania, has found Mr Kelleher and two others, Martin Kenney and Samuel Lohman, in contempt for their role in funding the AJA litigation, as they breached an injunction barring the Liberians from ever attempting to enforce the judgment.
The ruling by Judge Paul Diamond means that Mr Kelleher and the others could be ordered to pay CWW’s legal costs, which are likely to run into millions of dollars. The court has set Friday, August 5th, to deal with this.
Malta companiesJudge Diamond
“CWW will ask for an award of the fees expended in this case and will seek to enforce that award against Mr Kelleher and the others,” he said. Chubb was not a party to the court case, but it assumed CWW’s liabilities in 1999 and this has to indemnify against legal judgments.
It is also understood that a contempt ruling by a federal court could potentially create difficulties for Mr Kelleher in any business dealings in the US or with state or government agencies.
He is now based in the Republic, but lived in Chicago for 11 years and his Shelbourne Developments was the principal backer of the Spire, a high-rise residential tower planned for the US city, whose construction stalled in the financial crisis.
Efforts to reach the developer were not successful on Wednesday.
The Liberians involved lost their businesses in the country’s civil war in the 1990s. Commercial property owner AJA claimed against an insurance cover it had with Cigna, but in 1995 the US district court ruled that the policy excluded damage caused by war.
The US supreme court upheld this. AJA then went to a Liberian court, which in 2000 ordered Cigna to pay $66.5 million. However, in 2001 US judge Thomas O’Neill barred AJA from taking any action to enforce that judgment in any jurisdiction.