A property developer from Belfast will become the first businessman to try to block the transfer of bank debts into the Irish Government’s NAMA scheme.
Paddy McKillen began legal action against NAMA (National Asset Management Agency) on July 1 to stop the State's so-called ‘bad bank' from taking over millions of euros in loans which he argues are being serviced.
The case is being taken by Mr McKillen personally and by 15 of his companies. Court records show he is the only developer to have begun such a case.
He has already lodged an ‘originating statement’ with the courts in Dublin and the case is listed for mention on July 19. It is also understood that Mr McKillen may look to move the proceedings to the Commercial Court to resolve it more quickly.
Mr McKillen’s legal challenge could have huge implications for other borrowers who want to keep their loans out of NAMA, as well as for the banks involved — Anglo Irish, AIB, Bank of Ireland, ESB and Irish Nationwide.
NAMA was set up to get €80bn (£66bn) of problem property loans — including €5bn (£4bn) from Northern Ireland — off the books of five Irish banks in order to get them lending again.
But a spokeswoman for the developer said earlier this week that “there is no justification for NAMA taking our loans”.
“All our loans are fully performing against quality assets with no loans and developments. We are simply protecting our business,” she said.
Mr McKillen could not be reached for further comment yesterday. A spokesman for NAMA declined to comment on the case.
Belfast-born Mr McKillen moved to Dublin after leaving school to work in the family business, DC Exhausts.
He is now a major player on the Dublin property market.
The publicity-shy tycoon was in the news this year when Abey Developments, which he owns with Tyrone businessman Padraig Drayne, took legal action against customers who failed to complete the purchase of apartments in Belfast’s Custom House Square.
Buyers had failed to complete contracts because mortgage companies are now valuing them much lower than buyers agreed to pay before the property crash.