Gareth Graham launches legal action against Cerberus

A Belfast businessman has launched legal action in an attempt to stop Cerberus, the US investment fund, putting two of his companies into administration.

Cerberus bought the entire NI loan book of Nama, the Irish government's 'bad bank', in 2014 for more than £1bn.

Among them were those advanced to Gareth Graham's property firms.

It has already put two of his companies into administration and is attempting to do the same with another two.

Mr Graham is challenging Cerberus on a number of grounds, including the validity of loan guarantees.

It is understood to be the first legal challenge Cerberus has faced since it began operating in Northern Ireland.

Earlier this month, it appointed administrators to Fernhill Properties NI Ltd and AD Enterprises (NI) Ltd.

Fernhill Properties developed the College Court Central apartment complex in Belfast city centre.

AD Enterprises owned the Lyndon Court complex on Queen Street also in Belfast city centre.

It is now attempting to appoint administrators to STH 500 and Lehill Properties which own a variety of commercial properties in Belfast.

A barrister for Cerberus, David Dunlop, told the High Court that his client would need three weeks to reply to Mr Graham's affidavit.

The judge adjourned the case to allow the reply to be prepared.

Cerberus' business model involves borrowers rapidly repaying the former Nama loans by selling properties or finding new financial backers.

A number of borrowers have been able to reach a deal with Cerberus but it has also enforced some loans by appointing administrators or receivers.

Cerberus has previously said it has "a long and demonstrated history of treating our borrowers consistently and fairly".

It added that: "Not every borrower will like the outcome."