THE ENGLISH HIGH Court gave judgment today against Patrick McKillen in the court case he brought against NAMA, Derek Quinlan and the Barclay brothers.
The property developer argued that NAMA should have consulted with shareholders in Quinlan’s company Coirin Ltd before selling on its multi million euro debt.
NAMA took over €800 million of debt of Coroin Ltd in June 2010 and sold them to the Barclay’s investment vehicle Maybourne Finance Ltd (MFL) in September 2011. This allowed the Barclays to take over some of London’s most prestigious hotels, including the Savoy and Claridges.
McKillen alleged that the debt transfer from NAMA to MFL was invalid, arguing that NAMA had failed to comply with a contractual requirement to consult with Coroin – and its other shareholders, including McKillen himself - before transferring the loans.
In June this year, an English court dismissed an appeal by the developer in relation to the legal question of whether NAMA was required to consult with Coroin.
The three judges held unanimously that NAMA did not have to consult, meaning that the transfer of the debt to MFL was valid.
Today the English High Court delivered judgement on the main body of Mr McKillen’s claim.
In a detailed judgement, Justice David Richards found that given the earlier judgement in the Court of Appeal on the issue of consultation, McKillen could not rely on his claim of invalidity against NAMA in the High Court proceedings.
He also noted that he was satisfied that NAMA would not have extended the Coroin loan facilities under any circumstances and that whilst McKillen was aware of this, he still chose not to pursue alternative funding for the company in the interim period.
Justice Richards agreed with NAMA’s central position that Coroin’s debt of €800 million was unsustainable and the company was overleavaged by between €190 and €250 million.
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