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Developer McKillen in NAMA legal challenge

A major legal challenge against the Republic’s National Assets Management Agency (NAMA) by a Belfast-born property developer will be heard in Dublin in the autumn.

The high-profile trial involving businessman Paddy McKillen has been listed for hearing on October 12.

It is the first such case of its kind to come before the courts.

Mr McKillen is challenging the transfer of €80m in loans his companies borrowed from Bank of Ireland to the so-called ‘bad bank’.

Dublin’s Commercial Court heard claims yesterday that Mr McKillen’s loans are “fully performing” and the move would have “a drastic and |detrimental impact on his business and property rights”.

Lawyers for NAMA and the State told Mr Justice Peter Kelly that the legal bid — which also alleges the Act under which NAMA operates is unconstitutional — could have significant ramifications for the agency’s work.

However, barrister Michael Cush, acting on behalf of Mr McKillen, said he did not see the proceedings as a full-frontal attack on NAMA.

Mr Justice Kelly said he was satisfied the case was one of very considerable urgency.

Mr McKillen co-owns a number of Northern Ireland registered property firms including Belfast Office Properties and Finbrook Investments. His other investments include a sizeable stake in Maybourne Hotel Group and he is a major player on the Dublin property market. He moved to Dublin after leaving school to work in the family business, DC Exhausts.

Earlier this year the tycoon, who co-owns Abey Developments with Tyrone businessman Padraig Drayne, took legal action against customers who failed to complete the purchase |of apartments in Belfast’s Custom House Square.

Meanwhile, Allied Irish Banks (AIB) has transferred a second tranche of loans for a further 15 customers to NAMA.

A statement from AIB yesterday said the combined total of the loans was €2.73bn and the discount rate was 48.5%. The transfer follows the first tranche previously transferred in April for nine customers totalling €3.3bn to which a discount rate of 42% was applied.

“Loans will continue to transfer in tranches selected by NAMA. The actual discount on the total loans to be transferred will be determined when all the loans are valued and discount rates on individual tranches will vary,” said an AIB spokeswoman.

n The National Assets Management Agency (NAMA) was set up by the Irish government in response to the property crash which has crippled the Republic’s banks. It was set up to |purchase €80bn of toxic assets — |including €5bn from Northern Ireland — from five banks; Anglo Irish, |Allied Irish, Bank of Ireland, ESB and Irish Nationwide. It is funded by the Irish taxpayer.

Belfast Telegraph