PROPERTY DEVELOPER Paddy McKillen has recruited Nobel Prize-winning economist Joseph Stiglitz as one of his expert witnesses in his legal action against the transfer of his bank loans to the National Asset Management Agency (Nama).
Dr Stiglitz, a professor of economics at Columbia University in New York, has sworn one of nine witness statements filed in the High Court this week by Mr McKillen’s legal team in what is the first legal challenge against Nama.
Mr McKillen and 15 of his companies took legal proceedings against Nama and the State last July.
They claim their loans at Bank of Ireland were being repaid in full and that their transfer to Nama would have a “drastic and significantly detrimental” impact on their business.
The State has told the court that the case presents “a very real threat” to the vital work of Nama.
The case has been given a fast-tracked hearing date of October 5th in the Commercial Court.
The Government set up Nama last year to remove the most toxic loans – the debts of property developers – from five State-guaranteed lenders.
Nama is acquiring €81 billion in loans, including good loans on investment properties such as office blocks linked to development loans.
Mr McKillen, who developed the Jervis Shopping Centre in Dublin, has said he has bought no Irish assets since 1998 and so has not engaged in speculative development.
Dr Stiglitz criticised the decision to set up Nama on a visit to Ireland last year, saying the Government was “squandering large amounts of money to bail out the banks”.
Expert statements from former Columbia economics professor Michael Cragg and US banking consultant Joe Belanger have been submitted by Mr McKillen. Prof Stiglitz and Dr Cragg have worked jointly on expert statements in US legal actions relating to financial matters.
Affidavits sworn by Jim Power, economist at the investment company Friends First, and Ciarán Ó hOghartaigh, professor of accounting at the UCD school of business, were also filed this week. Banking consultant Conor O’Malley and UK banker Marcus Sewell Trench have also sworn affidavits.
Mr McKillen’s spokeswoman declined to comment on the content of the affidavits, but said: “We are simply taking this case to protect our business.”
Nama would make no comment.
The State agency has filed affidavits from Trinity College economists Philip Lane and Dermot McAleese in support of its defence in the case.
