Paddy McKillen wins case over 2.1bn-euro debts

Mr McKillen's assets include luxury hotels such as London's Connaught

Luxury hotel owner Paddy McKillen has won his case against the Irish bad debt agency, frustrating Dublin's bank clean-up plans.

The Irish supreme court ruled the 2.1bn euros ($2.9bn, £1.8bn) of loans could not be transferred to the National Asset Management Agency (Nama).

Mr McKillen had argued that his repayments were up-to-date, so they should not be treated as toxic.

The ruling does not block the transfer, but means the process has to restart.

The court found that the Republic's loan transfers were invalid because the action had begun before Nama was formally incorporated.

Toxic label

Mr McKillen's contention - that his loans were not toxic debts and the transfer would damage his business - does not appear to have been relevant to the decision.

The Irish government wanted to include some performing loans - such as Mr McKillen's - in the agency's loan portfolio in order to provide it with some guaranteed income.

Among Mr McKillen's assets are luxury hotels Claridges, the Connaught and the Berkeley in London, as well as the Clarence in Dublin, which he owns jointly with members of the band U2.

The ruling overturns an earlier decision by the commercial court that found against the property tycoon.

In that case, the Irish state argued that the challenge was a very real threat to the vital work of Nama and was of enormous economic significance.