ANALYSIS:DURING THE second day of the case taken by Paddy McKillen against the National Asset Management Agency (Nama), his legal team recounted his frustration in trying to get answers from Nama about why it wanted his €2.1 billion in loans.
The issue runs to the core of McKillen’s case – he argues that his constitutionally protected rights to fair procedures have been trampled over by the Nama legislation.
Michael Cush SC, for McKillen, read out correspondence dating to June 2010 between his lawyers and Nama, and his main bank, Anglo Irish Bank and the agency.
The letters outlined how he could not get a response from Nama about whether his loans were being moved or the grounds on which they were being moved.
The correspondence was sparked by news reports that McKillen’s loans were to be transferred to Nama.
When McKillen’s solicitors and even the chief executive of State-owned Anglo, Mike Aynsley, wrote to Nama, challenging the grounds for the transfer of €2.1 billion, the agency offered no answers.
Nama was only obliged to tell him he was one of their customers within 48 hours of a loan transfer.
McKillen’s counsel said that after 35 years building a business he wanted to know what Nama was at and what was its thinking as he felt the move was disastrous.
There was no reply, said Mr Cush. Aynsley came to quite a stirring defence of McKillen in a letter to Nama last June. He disputed – as the agency had claimed – that his loans posed a systemic risk and that he had a large exposure to the land and development sector, the collapse of which led to the setting up of Nama to save the banks.
Aynsley said he would be disappointed if McKillen was “disillusioned, frustrated or alienated” by Nama’s failure to explain its actions as he believed McKillen had the “capacity to actively participate in the country’s recovery”.
McKillen claims he is being adversely affected by having his loans moved to Nama. His legal team has argued that falling property values may mean that he is in breach of loan agreements.
But there are technical defaults and banks work with customers on such issues, they claim, whereas Nama didn’t operate like this as it was “a work-out vehicle”.
Mr Justice Nicholas Kearns and Mr Justice Frank Clarke – two of three judges hearing the case – pointed to the bigger picture, saying that things had changed following the global financial crisis.
If Anglo had not been saved by the Government, then the bank would be insolvent and it would be adopting the same position as Nama, said Mr Justice Clarke.
No liquidator appointed by a bank to a business would have the powers that Nama has, Cush said in reply.
McKillen’s team is due to finish its opening argument today, allowing Paul Gallagher SC, the Attorney General and the lead author of the Nama legislation, to set out the case for the defence.
