Laura Noonan in today’s Irish Independent reports that of the 30 top NAMA developers, 18 have signed “or are close to signing” a memorandum of understanding with the agency and these 18 are seen as being “relatively safe” (presumably that’s a direct quote from NAMA). Of course the reported phraseology might mean that all 18 of the developers have yet to sign, and “close to” is a very imprecise term. In addition to the signatures of the developers, the memoranda of understanding will need be signed by NAMA, which might require the agreement of the NAMA board, and potentially the spouse of the developer. And after the memorandum of understanding comes the Heads of Terms and finally a full agreement, and these two subsequent documents will also need to be signed by the developer, NAMA and potentially the developer’s wife. Next Tuesday will be the 10th of May, 2011 and the first anniversary of the completion of the transfer of the first Tranche of loans to NAMA. Now the first 30 developers have an average loan exposure of €900m and the business plans will not be straight-forward to say the least. That said, it is difficult to conclude anything other than NAMA is well behind schedule in its agreements with developers.
As for the remaining 12 developers in the Top 30, apparently five are facing foreclosure action by NAMA because the memoranda of understanding have not been agreed. The other seven are presumably already subject to foreclosure action.
And here’s where it starts to become very messy. NAMA does not generally disclose the identity of its developers – the agency stubbornly stuck to its guns last November 2010 at the Oireachtas Committee of Public Accounts hearing where Deputy Roisin Shortall in particular pressed NAMA for names of the Top 10 but the agency did not yield and asserted that such information was confidential. So we don’t definitively know the identity of the Top 10 or the Top 30. That said, Ireland being Ireland, we have had what seemed like well-informed reporting which speculated about the Top 30 and it is that reporting (particularly this and this article) which forms the basis of the table above. A further complication is that the Top 30 developers have extensive portfolios of property that might be split across many companies and some of those companies are subject to receivership and some aren’t. For example, the only company with which David Courtney and Jerry O’Reilly have been associated which is subject to a NAMA receivership is Radora Developments which was responsible for the Elm Park development.
NAMA has foreclosed on quite a number of developers not on the above list. Jim Mansfield is not there, for example; reporting suggests that his debt to NAMA is “tens of millions of euro” which might mean he was too small for the Top 30. Jim however owes loans to other banks and Bank ofScotland(Ireland) foreclosed on the Citywest hotel complex last year. The implication from Laura’s reporting is that NAMA has foreclosed on seven of the Top 30 and that being the case, I would say those seven refer to Liam Carroll, Bernard McNamara, Derek Quinlan, Paddy Shovlin, Paddy Kelly, David Courtney/Jerry O’Reilly (Radora) and Ray Grehan (where the receiver has been “stood down”, temporarily perhaps). In addition, McInerney is in examinership and its appeal against the withdrawal of that examinership is scheduled to be heard at the Supreme Court this week. There was a report about receivership in respect of Sean Dunne in the Irish Sunday Times (not available online) but that seems to have been denied by Sean’s spokesman and nothing has come up in the Iris Oifigiuil.
So we don’t know the identity of the Top 30, we probably just about know the receiverships affecting the Top 30 and we certainly don’t know the identity of the 18 that NAMA claim have signed, or are close to signing, agreements. We most certainly don’t know the identity of the five that may be facing imminent foreclosure.
As always with these pieces, I get concerned that the media can get used by NAMA to wave its stick at recalcitrant developers – since NAMA doesn’t disclose confidential information and not all developers are networked with their competitors sufficiently to know the status of the negotiations with NAMA, there is a concern that developers will read articles like those in today’s Independent and conclude they are risk. Which they might be. Though they might also conclude that NAMA’s apparent failure to sign the three documents that comprise an agreement with a single developer, one year after absorbing the first tranche, might mean there are more general difficulties at the agency.
UPDATE: 5th May, 2011. Its status is hardly much above tittle-tattle but the Irish Times today claims that two Top 30 developers will be on the wrong end of a NAMA receivership application by the end of next week, that is, Friday 13th May, 2011. The two are not named. The grandly-titled “Around the Block” column in the newspaper claims “one of the top 20 borrowers is expected to move to the UK this month with the aim of declaring himself bankrupt, while another well-known name has already done so.” We don’t get the identity of either from the column. And on the subject, I didn’t regard John Fleming as a Top 20 developer and he is the only significant developer whose bankruptcy has been reported here. So who is the Top 20 developer who “has already done so” and who is the one expected to move to the UK this month? Tittle-tattle at its finest from the grandly-titled Paper of Record.
I would question the expertise of the NAMA staff, I would also question the recruitment methods and the safeguards that are or are not in place that would stop the poacher from becoming game keeper so to speak? Who is safeguarding the taxpayer’s interest in this new lottery carrousel for the chosen few ?
Given it is a criminal offence for Nama officers to leak confidential information to the media, where are all of the garda investigations into the numerous leaks that have taken place to date? The former employees of some Nama developers are now working for Nama and there have been examples of untrue and malicious leaks to the media (Dunne story above being a glaring example). The untrue stories tend to just die a death rather than be exposed as lies by other elements of the media, who no doubt want to keep up the illusion that they are getting reliable stories from Nama sources and that there is nothing really wrong with publishing unture stories given illegally by unnamed Nama sournces with an axe to grind. I think the public deserve better media analysis of Nama and what a witch hunt it has become and a waste of money.
Given nearly every incompetent lawyer and accountant in the state now has a job with Nama either as an officer or consultant, even those who played their own role in the property bust, why not give our gardai a role too, investigating Nama leaks for extra pay? Makes as much sense as bringing in forensic accountants to chase an imaginary pot of gold.
Many of the developers mentioned above haven’t even gotten near the memorandum stage with Nama who seem to be totally preoccuppied with the many drama’s they are already embroiled in. Indeed getting a Nama man on the phone these days is difficult. Nama are trying to force developers to hand over assets they do not own, such as assets in trust, or assets handed over to family members in the boom times due to tax planning, not because anyone foresaw the mess we are all in now. The reality is that many of these assets are largely worthless inthis market anyway. Their approach is illegal and vindictive. The Irish Independent story stinks of an effort to scare one particular top ten developer who is fighting Nama because he has no personal guarantees. Nama didn’t get the Grehan receivership right despite all of their “experts” and the fact that they had months to prepare for it, and are bound to keep on making legal cock ups if they have to take out developers. Developers should keep in mind that it is in Nama’s interests to do a deal as much as the developers, it sounds like the receivership road is a relief for most developers, and a costly and lengthy nightmare for Nama and the Irish economy.
Rumours…… NAMA in crosshairs now ….. Dublin City Council has indicated that it will proceed to prosecute NAMA and Michael Kelly of Glandore properites over their non compliance of Section 59 planning enforcement with regard to neglect of the former Hume Street Hospital.
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@media/namasceptic: I wish that I had written that!
@NWL, BTW you missed Capel.
@WSTT, Capel were missed deliberately as I didn’t think they were in the Top 30 and like Jim Mansfield would have been lower down the chain. I might be wrong as NAMA has never disclosed the identities of the top developers. There is a list of receiverships maintained here and there are now probably 20 separate groups that have been subject to receivership/liquidation/administration, and the assumption on my part has been that most are not in the Top 30.
http://namawinelake.wordpress.com/the-developers/