Stay sought over €6.3m court ruling

FINANCIER NIALL McFadden has asked the High Court for a stay on a €6.3 million judgment against him pending his Supreme Court appeal challenging the entitlement of National Irish Bank (NIB) to that money.

Rossa Fanning, for Mr McFadden, said a stay was justified because his client has a genuine appeal against the High Court finding that NIB was entitled to judgment.

Mr McFadden was concerned that if there was no stay, NIB would aggressively move to enforce judgment, Mr Fanning added.

Responding to arguments by James Doherty, for NIB, that Anglo Irish Bank had last year obtained a €15 million judgment against Mr McFadden with no stay, Mr Fanning said Anglo had not moved to enforce that judgment and there was a “completely different relationship” involved with ongoing arrangements between Anglo and Mr McFadden’s Boundary Capital group.

Opposing the stay, Mr Doherty said the court had ruled his client was entitled to judgment.

Mr McFadden had very significant liabilities, NIB had previously expressed concerns he may seek to avail of UK bankruptcy procedures and it could face a greater prejudice if a stay was granted, Mr Doherty added.

If no stay was granted and Mr McFadden ultimately won his Supreme Court appeal, there was no suggestion NIB was not a mark for compensation, he added.

Mr Justice Frank Clarke said the application raised important issues which he wanted to consider and he would rule on the matter on Tuesday. He also adjourned to then the making of any orders in the case.

Earlier this week, Mr Justice Clarke found that NIB was entitled to a €6.3 million judgment against Mr McFadden arising from his personal guarantee over a bridging loan to Naldin Ltd to help acquire the Buy Sell classified ads business.

He adjourned the case to yesterday to allow the sides to consider his detailed judgment.

Mr McFadden, St James’s Street, London, had put together a deal in 2007 under which Naldin Ltd took over Buy Sell from Associated Newspapers for €21.3 million in a deal funded by NIB which advanced some €18 million to Naldin.

After Naldin was unable to raise equity finance, the business ran into difficulties.

An examinership failed, a receiver was appointed by NIB and the Buy Sell business was ultimately sold for some €1.9 million.

NIB said that while the assets of the Buy Sell group would not meet its security for the loans provided, it had taken some comfort from Mr McFadden’s €6.3 million guarantee, especially where he also undertook, as long as he remained under any obligation to NIB, to maintain a level of unencumbered assets of some €20 million.