Spire developer accuses banking agency of fraud against federal court
Chicago Independent Media Alliance
Loop North News


(Above) Seen from the Lake Shore Drive Bridge, this 2.2-acre lot next to the Chicago River is where the Spire would have been built, arguably, if real estate prospects in 2008 had not been bleak.

3-Jun-18 – Accusations of attempted fraud of a United States District Court are being made by the developer of the failed Chicago Spire against the Irish banking agency it is suing.

Garrett Kelleher is suing National Asset Management Agency, which was formed after the worldwide collapse of real estate markets in 2008 to handle Irish real estate investments, including loans made to the Spire project by Anglo Irish Bank. The loans were eventually sold to The Related Companies for less than their value and now National Asset Management Agency, on behalf of Irish taxpayers, is looking to Kelleher to make up the $54 million difference.

Photo by William Zbaren Kelleher (left) says he was told he would not be sued to make good on his personal guarantee of the loans. National Asset Management Agency says it, too, is immune to a lawsuit because of an agreement in the 2014 Chapter 11 bankruptcy settlement of Kelleher’s company, Shelbourne North Water Street, L.P.

The agency has filed motions asking that either the lawsuit against it be dismissed or at least referred to a bankruptcy judge for a ruling on whether the lawsuit may proceed. National Asset Loan Management Limited is also a defendant in the lawsuit that will be heard by a judge in Chicago.

According to a motion filed by Shelbourne on May 29, the motions filed by National Asset Management Agency “make overlapping legal and factual arguments that grievously mislead this court as to many of the same facts.”

Their claims, says an attorney for Shelbourne, are “at best misleading and at worst attempting to perpetrate a fraud on the court.”

Shelbourne disputes that National Asset Management Agency was released from being sued by the bankruptcy settlement, arguing the agency is not the “predecessor” of The Related Companies that it claims but rather an “independent third-party that engaged in an arms-length transaction” to sell the Spire loans to Related.

Lawyer’s LinkedIn page appears to conflict with claim made in affidavit

J. Joseph Bainton, an attorney for Shelbourne, says in its 109-page motion to dismiss, National Asset Management Agency submitted an affidavit by its in-house legal counsel, Sheila Browne, that says she had “personal knowledge” that the agency acquired the Spire loans on November 1, 2010.

But on her LinkedIn page, Browne says she began her career at National Asset Management Agency in April 2011. In November 2010, according to the LinkedIn page, she worked for a law firm located 136 miles outside of Dublin, where the agency is located.

LinkedIn (Left) Sheila Browne’s LinkedIn page showing she started at National Asset Management Agency in April 2011. (Click on image to view larger version.)

Because she did not yet work there, Browne, according to Bainton, is not qualified to testify to matters occurring at National Asset Management Agency in 2010, which calls into question whether the agency even owned the Spire loans at the time.

“We can quickly prove by competent evidence that our charge of [National Asset Management Agency] willfully misleading the court is not mere hyperbole to which some lawyers are too frequently prone,” writes Bainton (right) in his motion filed on May 29, “by showing that it has attempted to perpetrate a fraud on this court with respect to the lynchpin fact upon which Shelbourne’s claims in this action are predicated, namely the proposition that [National Asset Management Agency] did not own the Shelbourne Note until May 21, 2013.” J. Joseph Bainton

Shelbourne is asking for 16 extra days but says its response will be ready by June 27.

The Chicago office of The Related Companies, Related Midwest, has proposed building two slender towers on the site, a 1,100-foot tower containing 300 condominium units and a 175-room hotel, and an 850-foot tower with 550 rental units. The project needs zoning approval by the city and financing.

 Previous story: Defendant in Spire suit says bankruptcy settlement included agreement not to sue

By Steven Dahlman | Loop North News | sdahlman@loopnorth.com

Published 3-Jun-18 2:40 PM

Loop North News


What’s news in the Loop and Near North neighborhoods of downtown Chicago.

Signup for our weekly email. No ads and no charge. Just enter your email address here...

Number of subscribers:
See this week’s update