Administrators acting for US investment fund Cerberus cannot sell one of Belfast businessman Gareth Graham’s repossessed properties at this stage, a judge ruled on Thursday.
Mr Justice Horner blocked a proposed deal for Lyndon Court in Belfast City Centre pending the outcome of a High Court action in January. But he also made clear Mr Graham will be liable for financial losses sustained by the administrators from a delayed sale should he lose the case.
The businessman is to give a legal undertaking which involves showing he has access to £250,000 (€339,000) to go towards any shortfall if he is ultimately defeated in the court battle over being put into administration.
Refusing leave to sell the property, the judge said: “My position is to hold the ring, maintain the status quo and ensure what I do pending the trial will cause the least possible injustice to either side.
“I will then hear the substance of the claim... I will make a finding and there will be serious consequences for the losing party.”
Nama loan transfer
Mr Graham, who is currently in the US, is a director and major shareholder in companies which own a variety of commercial and residential premises in Belfast. The firms’ loans were among those transferred over to Nama. Last year Cerberus snapped up Nama’s entire Northern Ireland portfolio in a deal worth more than £1 billion. With a buyer for Lyndon Court on Upper Queen Street said to have been found, administrators acting for the fund argued they are entitled to proceed with the sale. Their lawyers claimed judicial directions issued previously in the case only require that notification is given to the court. But Mr Graham’s legal team insisted the deal cannot go through without either his consent or court order. He wanted the sale put on hold until the outcome of a challenge to the validity of the administrators’ appointment.
The main action next year is expected to hear claims that there was an improper motive in the process. According to Mr Graham his businesses were financially strong and never missed a repayment. An alleged demand to repay the entire loan within a day is also set to feature.
No sale
In court on Thursday Mr Justice Horner stressed that the main dispute has still to be determined. Confirming he was blocking the deal at this stage, the judge said: “There’s no sale of Lyndon Court pending Mr Graham giving an undertaking to underwrite any loss (should he lose the case) and providing evidence he has a net worth of £250,000.”
In a statement, Mr Graham welcomed the court’s ruling.
“There is a long road to travel in this case and today’s judgement is a preliminary outcome to the first stage of the case. We welcome the ruling and remain resolute in our ongoing efforts to protect our property and our businesses.”
