Faddy, who was also linked with Wolves, made an emotional return to Everton as he felt gaffer Davie Moyes's desire to land him was stronger.
McFadden told the Scottish Sun : "There was a story behind the Celtic interest but I'm back at Goodison and that's all that matters.
"There wasn't really a reason why I didn't go back to Scotland, it really wasn't down to me.
"The way it was done wasn't proper - and that is it."
Asked whether any proposed deal with Celts collapsed on financial grounds or personal terms, he replied: "No, it wasn't right and it wasn't necessarily any of those things.
"It was just the way things were approached.
"I could expand on that, but I'm not going to.
"It's just one of those things. I don't know how concrete the interest was.