Irish businessman Gerry McCaughey has insisted insurance giant AIG should be barred from seeking a $4 million summary judgment against him in the US. AIG originally planned to call the verdict in Los Angeles last week.
The dispute stems from a failed New York hotel investment plan backed by Anglo Irish Bank, later IBRC, and a number of wealthy investors.
However, Mr McCaughey’s lawyers have argued that AIG does not have the right to enforce Irish judgments in favor of IBRC and an investment vehicle of the failed Irish bank called Mainland in the United States and on AIG’s behalf.
They have also objected to Mr McCaughey’s wife, Sophie McCaughey, who was named by AIG as a defendant in their Los Angeles case.
They also argue that if a verdict is reached, a 10 percent per annum interest rate allowed under California law should not be granted after the verdict.
AIG has notified the US court that it has the authority to collect the money due and wants permission to collect it from Mr. McCaughey directly or through his and his wife’s property.
AIG Europe launched the lawsuit against the businessman early last year.
Mr. McCaughey, who has lived in California since 2009, was part of a group of 50 Anglo Irish Bank clients who, between 2005 and 2006, invested in a fund involved in the acquisition and planned renovation of two hotels in New York City.
Mr McCaughey – who earned an estimated €31 million from the €98 million sale of his timber frame business Century Homes to Kingspan in 2005 – invested $1 million in the hotel fund. Of this, $620,000 was provided as a loan from Anglo. The remainder came from Mr. McCaughey’s personal funds.
However, the hotel project did not go as intended, mainly because the planned renovation would have been far more significant than planned.
Mr. McCaughey and several other investors subsequently sued Anglo Irish Bank, seeking a total of approximately $45 million in repayment, including their investment and damages. However, the High Court here dismissed the case and the Supreme Court later upheld that ruling. Costs were awarded against Mr. McCaughey.
AIG stated that in exchange for reimbursement of its costs in the lawsuit to IBRC, the insurer was “received the right to bring claims against Mr. McCaughey to recover on an assigned basis, with any recovered monies being divided between AIGEU and IBRC on an agreed basis “. .
AIG has also argued that the McCaugheys have “no valid defense” against the proposed judgment associated with their property.
The insurer also says in court filings that the McCaugheys’ appeal against the summary judgment “loosely alleges” that there is a proceeding “in Ireland to determine whether any rights to enforce the judgments against Mr McCaughey have also been vested in Deutsche Bank.” .
But AIG says the McCaugheys argue “without evidence” that Deutsche Bank acquired such rights.
