Irish developer Garrett Kelleher could shortly learn the extent of the legal bill he is facing as a result of his involvement in a failed €60 million insurance claim taken by a group of Liberian businessmen against a US company.
Mr Kelleher, who is best known as the backer of the Chicago Spire, invested $2.85 million in 2006 in the efforts of Liberian group Abi Jaoudi and Azar Trading (AJA) to enforce a $66.5 million judgment against US insurer Cigna Worldwide (CWW) in return for a share of the lawsuit's proceeds.
The case failed and in July, a US court found Mr Kelleher and two others, Martin Kenney and Samuel Lohman, in contempt for their role in funding the AJA litigation, as they breached an injunction barring the Liberians from ever attempting to enforce the judgment.
The US district court in Philadelphia, Pennsylvania has ordered the three men to appear on Wednesday for a hearing to determine the damages due to CWW. Judge Paul S Diamond's order warns that: "Failure to appear will result in prosecution for criminal contempt."
Last Friday the US court of appeals ruled against a challenge brought against this order by Mr Kelleher, Mr Kenney and Mr Lohman. This means that if any of them fail to turn up in the Philadelphia court on Wednesday, they risk facing additional sanctions.
CWW is likely to seek its legal costs, a figure reported to be $14 million. Chubb Overseas General, which took over CWW's assets, has indicated that it would seek to enforce that against Mr Kelleher and the other two men.
Civil war
Mr Kelleher invested in the AJA claim through companies based in
Malta
. They invested in CC International, which Mr Kenney and Mr Lohman established to get the judgment enforced on behalf of AJA and 22 other Liberian businesses.
The Liberians lost their businesses in the country’s civil war in the 1990s. Commercial property owner AJA claimed against an insurance cover it had with Cigna, but in 1995 the US district court ruled that the policy excluded damage caused by war.
The US supreme court upheld this. AJA then went to a Liberian court, which in 2000 ordered Cigna to pay $66.5 million. However, in 2001 US judge Thomas O’Neill barred AJA from taking any action to enforce that judgment in any jurisdiction.
The litigants also worked with the Liberian authorities, which appointed the country's insurance commissioner as receiver. The commissioner sued ACE, which had taken over Cigna's business, in the Cayman Islands. ACE, now part of Chubb, went back to the US court to enforce the 2001 order.
As a result, in July, Judge Diamond found Mr Kelleher, Mr Kenney and Mr Lohman in contempt of this order by funding continuing litigation. The three had questioned whether the court had jurisdiction to make this ruling. Mr Kenney recently said that they would appeal all unfavourable verdicts right up to the US supreme court.
