The National Asset Management Agency (NAMA), Ireland’s loan agency, is taking 12 developers to court over nearly $400m worth of property loans. However, one of the developers, Paddy McKillen, who is said to owe $3 billion to banks, is challenging an attempt to transfer $100m in loans held with Bank of Ireland to NAMA.
McKillen has hired Nobel Laureate Dr. Joseph Stiglitz, one of the world’s leading economic experts, for help in his case.
McKillen claims his loans should not be transferred because they are not development loans and are being repaid.
Dr. Stiglitz, a professor of economics at Columbia University in New York and a former president of the World Bank, will tell the court that the taxpayer "may be worse off" if NAMA takes over performing loans because it will likely result in an increase in public costs of recapitalizing the banks.
The developers, who face being shut down, are among the 1,500 who are moving or in the process of moving their loans across to the agency
On Friday, Brendan McDonagh, the chief executive of NAMA, said, “The borrower has to be in a frame of mind as to whether he wants to work with us. If he doesn't, then we have to take him to court."