Spire affiliate reports big loss linked to stalled tower
By Eddie Baeb and Thomas A. Corfman, Feb. 03, 2010
(Crain’s) — A Dublin-based affiliate of Chicago Spire developer Garrett Kelleher reported a $207.6-million annual loss, much of which is attributed to the stalled Spire project.
Clarinabbey Ltd. says in an annual financial report filed last week in Ireland that the company took a loss provision against loans made to other companies led by Mr. Kelleher – including one that’s been a major financing vehicle for the Spire. Clarinabbey says the provision stems from “uncertainty associated with the recoverability of amounts owed by group companies.”
Financial results were reported in Euros and converted to U.S. dollars.
The Spire project, a twisting, 1,194-unit condominium tower at 400 N. Lake Shore Drive that would have been the tallest building in the United States, may account for at least $135 million of the $197.7-million loss provision, based on a previous filing by Shelbourne Finance Ltd., which is the entity pegged to the provision in Clarinabbey’s filing.
Shelbourne Finance has previously said the firm provided an interest-free loan of $38.2 million to a Spire-related entity and separately advanced the project $96.8 million, according to its 2008 annual report, the most recent available.
Clarinabbey, whose majority owner is Mr. Kelleher, reported last week that it is “technically in breach” on loan-to-value and interest-coverage covenants with its lenders, a group that includes the now-nationalized Anglo Irish Bank Corp., along with Royal Bank of Scotland Plc and Bank of Scotland (Ireland) Ltd.
Clarinabbey says it’s working to negotiate a standstill agreement with the banks or a restructuring of its loans, but that “there exists a fundamental uncertainty over the company’s ability to meet its obligations as and when they fall due.”
The financial reports were filed with the Companies Registration Office in Ireland.
Calls to spokeswomen for Shelbourne and a voicemail left at the firm’s Chicago office on Wacker Drive weren’t returned.
Clarinabbey reported the $207.6-million loss for the period ended March 31, 2009.