Property firms linked to a Belfast businessman locked in a legal battle with US investment fund Cerberus are “hopelessly insolvent”, the High Court heard on Friday.
A judge was told the companies connected to Gareth Graham had debts of around £33 million, with the group’s assets put at £18 million.
The claims came as administrators acting for the fund argued they are entitled to sell one of the repossessed properties.
Mr Graham is opposed to the deal for Lyndon Court in the city centre going through without his consent or court order.
He wants any sale put on hold until the outcome of a challenge to the validity of the administrators’ appointment.
With Mr Graham contending that his businesses were financially strong and never missed a repayment, his legal team are set to claim an improper motive was involved in the process.
An alleged demand to repay the entire loan within a day is also set to feature.
Mr Graham is a director and major shareholder in companies which own a variety of commercial and residential premises in Belfast.
The firms’ loans were among those transferred over to Nama, the Irish Government’s so-called ‘bad bank’.
Last year Cerberus snapped up Nama’s entire Northern Ireland portfolio in a deal worth more than £1 billion.
In court on Friday counsel for the administrators questioned the strength of the improper motive allegation.
David Dunlop claimed there was no merit in the argument that the loans should not have been assigned to Cerberus.
“So far as the companies are concerned, they are hopelessly insolvent,” he said.
“The companies’ debt ... is about £33m, and the companies’ assets in November 2014 are £18m or thereabouts.”
At a previous hearing the court was told a buyer has been found a buyer for the Lyndon Court property on Upper Queen Street.
Mr Dunlop claimed the administrators are not prohibited from going ahead with the sale.
He contended that judicial directions issued in the case only require that notification is given to the court.
“The Graham connection’s argument is that the administrators need leave of the court to exercise power of sale, whereas we say there’s no restraint on the power of sale other than bringing the matter back to court to comply with directions,” the barrister added.
“There’s no injunction in place, therefore the administrator cannot be restrained.”
The case was adjourned until next week, when senior counsel for Mr Graham will make replying submissions.