AHG Properties Unlimited Company had sought summary judgment for €1.19m against Mr McKillen Jr over the guarantee on loans to buy a property in England for development as a 155-bed hotel and 1,500-capacity venue.
Mr McKillen Jr is a co-founder of Ireland’s largest hospitality group, Press Up, and son of well-known developer Paddy McKillen Sr.
The case first came before the Commercial Court last month when Mr Justice Denis McDonald granted a two-week adjournment at the request of Mr McKillen Jr’s side.
When it returned on Monday, Ross Aylward BL, for AHG, said the time had “borne fruit” and he was glad to say the case had been compromised.
Counsel asked that the case still be formally admitted to the commercial list and adjourned to this Thursday. The judge admitted the case and granted the adjournment.
Today’s News in 90 Seconds – December 3rd
In its proceedings, AHG claimed Mr McKillen Jr had provided a personal guarantee, limited to €1m plus interest, on loans totalling €10m to buy The Central Hall and adjoining buildings in Corporation Street/Ryder Street, Birmingham. The plan was to redevelop it as a 155-bed Dean hotel with a 1,500-capacity event venue.
The loans were made to Creative Cedar Ltd, a UK company which Mr McKillen Jr is a director of, and which is also part of the Press Up Group,
AHG said it always understood the loan facility was principally to buy the Birmingham property and that it would be subsequently refinanced by development finance from a separate lender.
However, difficulties arose about making repayment on the final date and efforts by the defendant to raise refinancing were not successful, AHG said.
In September, Press Up itself was taken over by Cheyne Capital, a London-based investment firm, in a debt-for-equity swap that left Paddy McKillen Jr, one of the co-founders, with a stake of about 10pc in the business. His co-founder, Matt Ryan, is no longer involved.
Many parts of the hospitality business continue to trade while some venues and brands have been closed or placed into receivership under the new management.