A property investment finance company is seeking judgment for €1.19m against businessman Paddy McKillen jnr over a guarantee he gave on the loans to buy a property in England for development as a 155-bed hotel and 1,500 capacity venue.
Mr McKillen jnr is a co-founder of Ireland’s largest hospitality group, Press Up, and son of well-known developer Paddy McKillen snr.
Investment finance firm AHG Properties Unlimited Company applied on Monday to Mr Justice Denis McDonald to admit its summary judgment proceedings against Mr McKillen jnr to the fast track commercial list. After hearing the defendant had requested an adjournment, the judge adjourned the matter for two weeks.
In an affidavit seeking admission of the proceedings to the Commercial Court, AHG director Tony O’Shea said Mr McKillen jnr had provided a personal guarantee, limited to €1 million plus interest, on loans totalling €10 million to buy The Central Hall and adjoining buildings in Corporation Street/Ryder Street, Birmingham. The plan was to redevelop it as a 155-bed “Dean” hotel with a 1,500 capacity event venue.
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The loans were made to Creative Cedar Ltd, a UK company which Mr McKillen jnr is a director of and also part of the Press Up Group,
Mr O’Shea said he always understood the AHG facility, provided in 2022 and 2023 in two tranches of €9 million and €1 million, was principally to buy the Birmingham property and that it would be subsequently refinanced by development finance from a separate lender.
However, Mr O’Shea said, as the final repayment date approached on December 30th, 2023, Creative Cedar sought an extension to April to allow for discussions regarding the potential refinancing of the AHG facility.
There followed a number of exchanges and a meeting Mr McKillen jnr in March in which it was learned that the sale of Dean hotels in Ireland and other Press Up hotels had concluded but it had not resulted in enough equity to repay AHG. A proposed refinancing deal would also leave redevelopment plans some €15 million short.
Mr O’Shea said Press Up newly appointed director, Ronnie Delaney, who was now in charge of the group, organised a meeting in London with the defendant’s father, Paddy McKillen snr and a number of other people involved in Press Up.
The meeting took place at the 22 Club in Grosvenor Square on July 10th last. Mr McKillen jnr was in the US for reasons that were explained by his father, Mr O’Shea said.
Mr O’Shea said there was a robust discussion about the Birmingham property and Mr McKillen snr said there was no onus on him to resolve the matter. “I challenged him on this on the basis that he was one of the ultimate beneficial owners of the borrower which owned the property”, Mr O’Shea said.
Mr McKillen snr also spoke of looking to raise finance for the property and that he was personally paying for security and insurance on it, he said.
There followed further correspondence and a meeting Mr McKillen jnr after which AHG advised the defendant it was reserving its rights under the loan agreement and evaluating enforcement options.
Mr O’Shea said he visited the Birmingham property on September 25th last to find it had deteriorated significantly since he visited in 2021. He was concerned it was not adequately secured and while he was there he said two trespassers gained access.
Two passing police officers went after the trespassers and could not find them. But the officers advised Mr O’Shea not to go in and that the basement was under two feet of water.
On September 30th, AHG notified Creative Cedar that some €12.5 million was now due on the loan facility, including interest. It also made a formal demand of Mr McKillen jnr to repay €1.198 million under his personal guarantee for the loan.
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