Landing a major blow to Dublin’s bank balance sheet clean up efforts, luxury hotel chain owner Paddy McKillen has won his case against the Irish bad debt agency.
The Irish Supreme Court has ruled that the €2.1 billion (£1.8 billion, $2.9 billion) loans can not be classified as ‘bad’ and hence can’t be transferred to the National Asset Management Agency (NAMA).
McKillen had argued that his payments are up-to-date and hence can’t be classified as ‘toxic’.
The latest ruling does not block the transfer, but will certainly delay the process as it needs to start afresh.
The court found that the government’s loan transfer had taken place before NAMA was formally incorporated and hence the move was invalid.
However, Mr. Mckillen’s contention that terming his loans as ‘toxic’ and transferring them to NAMA will hamper his business seemed to be irrelevant to the judgment.
The Irish government had transferred some performing loans like Mr. McKillen’s, to NAMA’s portfolio to ensure that the debt agency receive some guaranteed monthly income.
Mr. McKillen’s assets include luxury hotels like the Connaught, the Berkeley and Claridges in London and the Clarence in Dublin –which he co-owns with the band U2.
The recent ruling overturns the previous commercial court judgment that went against the hotel tycoon. The government had then successfully argued that the case had enormous economic significance since it seriously affects the activity of NAMA.