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Garrett Kelleher with his 2,000-foot Chicago Spire plan in 2008

Chicago Spire scheme would be Kelleher’s ‘economic salvation’

Garrett Kelleher with his 2,000-foot Chicago Spire plan in 2008

A LAWYER for a firm controlled by Irish developer Garrett Kelleher has claimed in US court filings that the businessman is indirectly owed “much, much more” than he “could conceivably owe Nama”, even if the High Court here finds the agency can enforce personal guarantees provided by Mr Kelleher.

And the lawyer has also claimed that the failed development in Chicago by Mr Kelleher and his firm of what would have been one of the world’s tallest buildings – the Spire – still represents the “economic salvation” of Mr Kelleher and his companies.

The claims were made in a declaration to an Illinois court this week as a firm controlled by Mr Kelleher seeks more than $1.2bn (€1bn) from Nama in a dispute related to the planned Spire.

Joseph Bainton is an attorney at the New York-based firm Barclay Damon which is representing Mr Kelleher’s Shelbourne North Water Street Corporation in the action.

He claimed in his court declaration that continuing the development of the Spire in Chicago would have been the most economically advantageous way for which Mr Kelleher’s Shelbourne companies to pay back money it owed to banks.

Mr Kelleher’s plans to develop the Spire in 2007 and 2008 coincided with the global economic meltdown. The 116-storey building was to be home to about 1,200 exclusive apartments.

The initial development of the scheme, with construction of foundations having begun in 2007 but halted in 2008, was bankrolled by Anglo Irish Bank to the tune of $69m (€59m). With interest, the amount owed later topped $90m (€77m).

As Ireland’s economy went into free-fall and banks faced collapse, the loans were put up for sale by Nama.

The Irish Independent revealed yesterday that former Taoiseach John Bruton has found himself caught up in the case being taken by Mr Kelleher’s firm against Nama in the United States.

Ted Williams, the managing partner of a US asset management firm, has claimed in a declaration made to an Illinois court that Mr Bruton had agreed to act as a liaison in Ireland as the firm – Point Capital Partners – tried to buy the Spire loans between 2010 and 2011.

But Mr Bruton has strenuously denied that he ever acted in such a capacity for Point Capital Partners.

He has acknowledged that he did provide some “pro bono” assistance to the firm, in terms of helping to put it in touch with people in Ireland who may be able to assist, but did not liaise on its behalf with Nama.

The loans attached to the Spire project were eventually sold to a company controlled by US property billionaire Stephen Ross.

Mr Kelleher is suing Nama in Chicago, claiming he is due the $1.2bn as a result of losing control of the Spire project, and from future profits that would have been generated from the sale of its apartments.

Nama has previously dismissed the allegations, with the agency’s US lawyer describing Mr Kelleher’s claim as “insupportable”.

Mr Bainton has claimed in his court declaration that given the US property market was recovering “the fastest and earliest” following the global economic implosion of 2008, “development of the Spire project represented the best, if indeed not the only practical way for the ‘Shelbourne Connection’ [Mr Kelleher’s Shelbourne company and related entities] to recover by paying the Irish banks what the ‘Connection’ owed then and ride out the economic downturn”.

Nama subsidiary National Asset Loan Management is currently prosecuting a case in Ireland, in which it seeks to recover approximately €47m from Mr Kelleher based on his guarantees of certain loans.

 

 

independent.ie

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