1-Jul-19 – More than $1 billion, and perhaps vindication, hangs in the balance as a federal judge in Chicago considers arguments against her dismissal of a lawsuit by a developer who tried to build a 2,000-foot-tall residential building along the Chicago River.

Garrett Kelleher says his Chicago Spire project, started in 2006, was derailed in 2013 by National Asset Management Agency, which was created in 2009 by the government of Ireland to acquire property development loans from Irish banks.

He sued in February 2018 for $1.21 billion but on March 14, 2019, Judge Andrea Wood said United States District Court lacks the authority to hear the case because National Asset Management Agency is not subject to its jurisdiction.

Kelleher is asking Wood to reconsider that decision, citing federal rules of civil procedure that allow a court to alter a judgement upon finding of a “mistake, inadvertence, surprise, or excusable neglect.”

He is asking for the dismissal to be vacated and that he be allowed to present the case to a Chicago jury. With less than 24 hours’ notice, a status hearing scheduled for June 27 was rescheduled to August 7. (Left) What the Chicago Spire site looked like in May 2018.

Kelleher is challenging the court’s conclusion that National Asset Management Agency is not subject to its jurisdiction, arguing that the agency’s commercial activities had a “direct effect” in the United States. It funded payroll and operations of his Chicago office, for one thing.

The motion also challenges the conclusion that National Asset Loan Management, a co-defendant in the lawsuit, is entitled to sovereign immunity. Such immunity would apply if the Dublin-based company was majority-owned by a foreign state, under provisions of the Foreign Sovereign Immunity Act. But 51 percent of the company, Kelleher points out, is privately owned.

Attorneys for National Asset Management Agency say Kelleher is raising new arguments, which is inappropriate for his motion, and rehashing old arguments that the court has rejected. They say arguments that the banking agency had commercial activities in the United States were considered by the court and rejected as not enough to free the agency from immunity.

In July 2013, the Spire site and loans to Kelleher that were acquired by National Asset Loan Management were sold to RMW Acquisition Company, doing business as The Related Companies, for about $35 million. A proposal by Related Midwest for two slender towers on the site was rejected by the city but the Chicago firm has until next February to revise its plan.