It’s been almost two months since NAMA was publicly banging its shields and warning that the loans of up to five Top 30 developers may be at risk of enforcement action. News coming through from credible sources that NAMA has failed to agree a memorandum of understanding with (EDIT) David Daly, the 61-year old north Dubliner (pictured here with his wife, Mary) who cut his teeth at Joe Moran’s Manor Park development company, and that administrators are about to be appointed to its UK assets which include the 15,000 sq ft Louis Vuitton flagship store at 160 new Bold Street valued at GBP £200m last year and 26 acres in Slough, west of London (reportedly worth GBP £45m) owned by David’s Kelobridge Limited where planning permission for 300 homes was apparently granted in 2009.
Its Irish developments include Greenwood (Coolock, Dublin), Prospect Manor (Rathfarnham, Dublin), Swords Demesne (Swords, Dublin), Swords Downs (Co. Dublin), Blanchardstown Heath (Dublin), Castleview (Swords, Dublin), Holywell (between Malahide and Swords, north Dublin), Clare Village (Malahide Road), Abbeystone (between Malahide and Swords, north Dublin).
It is understood that NAMA served receivership/enforcement papers today but that an application may be made for an injunction tomorrow morning. If confirmed, this receivership would mark the first major enforcement action by NAMA since the messy Grehan receivership at the start of May 2011.
UPDATE: 23rd June, 2011. Britain’s Property Week is reporting that “the loans of Daly’s house building group, Albany Homes, one of the largest housebuilders in Ireland, are not part of the [enforcement] process” and that there remains the possibility of a deal being struck between NAMA and David Daly. Property Week goes on to describe what is likely to be David Daly’s most valuable asset, the GBP £200m Louis Vuitton flagship store at 17-20 New Bond Street.
UPDATE: 25th June, 2011. RTE reports that David Daly is fighting back. He engaged Michael Cush SC to seek an injunction in Dublin’s High Court. There is no word of an action in the UK. Michael Cush SC might be best known in recent times for substantially winning Paddy McKillen’s case against NAMA. RTE further reports that Jim Hamilton of BDO Simpson Xavier has been appointed by NAMA as receiver in Ireland. In the UK Shay Bannon and Sarah Rayment of BDO have been appointed Law of Property Act administrators (LPAs, akin to property receivers and certainly cheaper than corporate receivers). RTE points out that NAMA’s actions do not relate to Albany Homes but to property owned personally by David Daly, though apparently the High Court application has been made in the names of three individuals (1) David Daly (2) Joanne Daly (presumably David’s daughter) and (3) Paul Daly (presumably David’s son). There is no mention of David’s wife, Mary Daly.
UPDATE: 27th June, 2011. RTE reports that application by David Daly and his two children Joanne and Paul was considered in Dublin’s High Court today and the upshot is that it has been set down for Thursday this week for mention/directions. Today NAMA assured the court that it has no plans to sell the property to which it has appointed receivers on Friday last. Interestingly the properties include the Airside Business Park in Dublin. It is understood that the Airside Retail Park is owned by David’s wife, Mary who doesn’t appear to have been part of the NAMA receivership action last week. NAMA was represented by James Doherty which is a new name in the context of NAMA.
UPDATE: 28th June, 2011. The Irish Independent today provides additional reporting on yesterday’s proceedings in Dublin’s High Court and claims that the hearing this Thursday (30th June) will be a substantive hearing and that affadavits are to be exchanged beforehand. In terms of the grounds for the application, they include the claim that the loans were not repayable on demand but possibly of more importance, particularly given the past involvement of Michael Cush SC in Paddy McKillen’s case – David Daly has engaged Michael Cush – is the claim that NAMA’s actions are offensive to the European Convention on Human Rights. This case may prove to have stronger legs than the Grehan brothers’ recent (failed) case against NAMA.
UPDATE: 5th July, 2011. The parties were back in court yesterday and proceedings are reported in today’s Irish Times and Independent . In terms of detail it is curious that David Daly claims the values of his properties is €457m which is the sum claimed by NAMA on the loans. The €457m is comprised GBP £269m in the UK (€299m at this morning’s exchange rates) and €158m in Ireland. Also of note is that once news broke of NAMA’s foreclosure action, David Daly reports contact from potential buyers but describes any offers as below value. NAMA has undertaken not to dispose of the properties without providing 24 hours notice to David Daly and at present NAMA’s stance seems to be to hold onto the properties and collect lucrative rent. In terms of the case itself, a full four-day hearing has been set down for next Wednesday, 13th July in the Commercial Court division of Dublin’s High Court – the case is already detailed in the Court’s Legal Diary. It seems that Judge Kelly might be presiding, which might mean some forthright questionning and comment.
UPDATE: 16th July, 2011. The hearing on David Daly’s application (ref 2011/5766 P) began on Wednesday 13th July, 2011 in Dublin’s High Court before Mr Justice Michael Peart. David Daly, 66 is joined in the application by his daughter Joanne, and son Paul. The respondents are National Asset Loan Management Limited (NAMA), the State, the Attorney General and AIB PLC – some reporting suggests the receivers, Jim Hamilton of BDO Simpson Xavier in Ireland and Shay Bannon and Sarah Rayment of BDO in the UK, are also respondents but that doesn’t appear to be the case from the court record. The Dalys are represented by solicitors LK Shields and their lead barrister is Michael Cush SC, who you might recall was Paddy McKillen’s barrister in the recently concluded legal battle royale with NAMA. NAMA is represented by A&L Goodbody. The State and the Attorney General are represent by the Chief State Solicitor, David J O’Hagan and AIB is represented by Maples and Calder. The respondents are represented by barrister, Paul Sreenan. In the following David Daly will be used as shorthand for the applicants and NAMA as shorthand for the respondents.
The hearing which lasted three days this week and is scheduled to continue on Tuesday next 19th July relates to the first of two applications by David. This hearing is to seek an injunction preventing NAMA taking control of the assets which secure the loans pending the hearing of the second application. The second application is challenging the receivership.
This week we heard the Daly’s claim that German bank Deutsche Bank had been interested in acquiring, for “hundred of millions” the €457m of loans owing to NAMA. NAMA’s action will have put an end to David’s involvement in those talks which he had initiated. Oddly enough Deutsche Bank was the bank cited by Paddy McKillen’s Maybourne group last year as being a candidate to re-finance that group’s loans which were NAMA-bound. According to RTE, the court was told by David’s barrister that he had always had a good relationship with AIB and never missed a payment and ominously perhaps for NAMA, that there were similarities between David’s business and Paddy McKillen’s. Like Paddy, David’s properties generated enough rent to cover interest payments and like Paddy, David had no opportunity to make representations to NAMA before his loans were acquired.
And yesterday, perhaps to coincide with the conclusion of the Paddy McKillen saga, NAMA is reported to have argued that remedies that might have been available to Paddy McKillen to stop NAMA acting, were not available to David Daly since he didn’t allegedly object to NAMA’s acquisition of the loans last year. Which seems incredibly shaky. If NAMA had not made a valid decision to acquire David’s loans then it is surely arguable that NAMA’s subsequent actions are not lawful. Yesterday’s proceedings are also reported by Mary Carolan in the Irish Times.
The case continues on Tuesday next 19th July, 2011.
UPDATE: 19th July, 2011. The hearing of this case continues at 11am this morning in Court 9. It was originally scheduled for four days which might mean today sees a conclusion. Judgment likely to be reserved to a future date but given the urgency of the application, it might be quicker than usual.
UPDATE: 12th September, 2011. Extensive, if a little muddled, reporting by RTE today. Qualified success for David in that the High Court has granted him the right to challenge NAMA’s actions at a full court hearing. However David has failed to get an injunction overturning the appointment of receivers and administrators and the judge seems to have concluded that David’s loans were in fact repayable on demand which might undermine David’s hearing. What happens next? David ‘s application (No 2011 5766 P) will now proceed to a hearing where David will have a full opportunity to air his objections to NAMA’s actions. Meantime NAMA has control over his assets. From today’s judgment (133-pages apparently according to RTE but not yet available from the courts.ie website) relations between David and NAMA broke down when David didn’t reverse a transfer of assets and cash to his wife in 2009. The transfer, reported to be include cash and assets of €80m, included €17m of cash and David’s wife was to have transferred some part of this back but there seems to have been some breakdown in relations. For this and other reasons, NAMA chose to act. So in conclusion, David gets to have his day in court but NAMA would seem to have the upper hand at this stage and certainly continues to control David’s assets through the appointed receivers/administrators.
UPDATE: 13th September 2011. The judgment is now available here (137-page MS Word 2003 document). There will be analysis tomorrow. Commenters are reminded of their responsibilities in commenting on here, which are particularly relevant when commenting on what is an ongoing legal case.
UPDATE: 14th September, 2011. Possibly stung by criticism at the perception that NAMA was allowing a NAMA wife keep 7m in cash from a spousal transfer in 2009, Emmet Oliver at the Irish Independent writes today that it “understands” NAMA has taken any previous deals off the table. Hardly surprising really given the keenness of the Dalys to now pursue the legal route.
UPDATE (1): 19th December, 2011. As commented on here last week, it is now confirmed as Mary Carolan at the Irish Times reports that the Dalys’ case against NAMA has been settled save as to the issue of costs – and on the issue of costs it is reported there is to be no costs order against NAMA which doesn’t look very promising for the Dalys. Apparently neither side is commenting and the terms of the settlement are confidential. So there! But what this means is that NAMA is now apparently unencumbered in any sale of the Daly assets to which receivers were appointed six months ago. And in the very near term, it might mean that 17-20 Bond Street is sold by receivers possibly to existing tenant, Louis Vuitton Moet Hennessy (LVMH). Speculation about the price suggests the property may fetch €350m (GBP 300m)
UPDATE (2): 19th December, 2011. NAMA has made a statement “NAMA and David Daly confirm that David Daly and his family have reached a settlement with the Receiver (BDO) and NAMA, whereby the sale of certain properties has been completed and the Daly family have settled the residual NAMA personal debt which has been the subject of recent litigation. As part of this agreement, all litigation between the Daly Family and NAMA has been withdrawn”
UPDATE (1): 20th December, 2011. The Irish Times has the inside track today on the Daly settlement (1) 17-20 Bond Street has indeed, according to the newspaper, been sold to LVMH for €350m (GBP 300m, chances are that the GBP 300m is correct and at current exchange rates the price tag is €358m) and (2) the Dalys have handed back €80m of assets to NAMA which had previously, reportedly, been transferred by the Dalys outside the ownership of the specific borrowers and (3) the €80m handed back includes €17m in cash which was reportedly transferred by David Daly to his wife, Mary. The Irish Times reports that the settlement means ” NAMA has recovered the €457 million debt owed by Mr Daly and his family” but that statement presupposes the assets recovered by NAMA are worth the difference between the €457m face value of the loans and the €350m-odd proceeds from the 17-20 Bond Street sale to LVMH. However, this is beginning to look like a solid success for NAMA if (a) it has recovered the face value of loans which it bought at a discount from AIB and (b) NAMA didn’t lose the Daly challenge about consultation and (c) NAMA is not stuck with what are likely to be substantial legal costs – on this last point we should find out in January 2012 what is happening to costs.
UPDATE (2): 20th December, 2011. RTE is now reporting that it is the LVMH chief executive, Bernard Arnault, in his personal capacity who is buying the Bond Street property and additionally says that the GBP 300m price tag is in fact for the 17-20 Bond Street Louis Vuitton store plus Smythson which is at 40 New Bond Street and next door Coach at 41 New Bond Street.
Any word on which Developer the Irish Indo is talking about today?
@Patrick, you remind me of the tourist that once asked me outside the GPO did I know where he could find the Spire. Although not yet confirmed by NAMA or Albany, the speculation is that it is David Daly’s Albany Homes.
From what I hear, this action doesn’t involve loans taken out by Albany Homes but rather Daly’s personal loans – this would include the Louis Vuitton store and his other London investments but not the Albany stuff.
@ElFuego, there’s not been confirmation one way or t’other but I understand NAMA’s alleged foreclosure action goes further than David Daly himself.
Word on the street is that, backed by a substantial European bank, David Daly offered to buy most of his assets out of NAMA, but that his offer was refused.
I have stated here before that NAMA has not yet recognised the fact that its best buyers are those financially well regarded developers that can raise outside funds to retrieve their properties at market level – but that commercial fact will eventually dawn when NAMA grows up.
It will be interesting to see if Daly challenges the legislation that purports to disallow him from purchasing his assets as unconstitutional. Maybe NAMA might argue that its refusal was just petty and vindictive and has nothing to do with constitutional rights or commerciality.
It also poses the question as to when will NAMA stop warehousing property and address the market?
As a postscript to the comment about NAMA warehousing property; an observer driving around the Dublin suburbs will notice that most development sites no longer have any security. This has not gone unnoticed by the more opportunistic members of the breakfast roll brigade and others who travel in white vans. Houses have been stripped of copper, wiring, sanitary ware, kitchen units, doors etc.
When the NAMA “grippers” moved in, or alternatively when the executives in NAMA were reviewing business plans, site operatives were removed from the payrolls without any thought of the consequences…. Penny wise and pound foolish, or just the lunatics in charge of the asylum? Your choice.
Neil’s piece in the times is troubling. Faced with an offer of refinancing from deutsche bank they instead foreclose! This would seem to go against current norms, even best practice? Was it a case of Enda Kenny’s intervention? Or purely cynical?
@Marcin, you can read NAMA’s protocol for dealing with developers looking to buy back their own assets here
http://namawinelake.wordpress.com/2011/06/13/enda-kenny-makes-serious-claims-about-nama%E2%80%99s-disposal-of-assets-to-developers/
This would presumably also extend to a “re-financing” unless of course the substitute financier was offering 100% of the loan, and there were no cross-collateralisation issues. I wonder if the national debate has now moved on sufficiently after the shock and anger of the events in 2008/9 that we are reaching a place where we can coldly consider if it is better to sell NAMA property and loans back to a developer (or a group which involves the developer) if that will yield the best financial result for NAMA. If we are, then the lawmakers will need move on this, because NAMA is constrained by the NAMA Act and indeed by former government statements.
‘He had told the court this had been done in 2009 as part of tax planning and on the advice of his accountants’
Not a tax expert but what type of tax planing would involve moving 80mil in assets to the wife including 17million in cash………………..
@John, the RTE reporting seems a little befuddled. The 133-page (!) judgment should be available shortly and may well better explain the details of this case.
“He said Mr Daly had told the court the family’s Irish assets had been conservatively valued at €158m and their UK assets at £269m”
Not as befuddled as the asset valuations backing the loans….no confusion the loans are DUE ON DEMAND…..one wonders if the ‘family’s’ assets include the wife’s substantial cash and other holdings estimated at 80,000,000.
http://www.guardian.co.uk/business/ireland-business-blog-with-lisa-ocarroll/2011/jul/14/louis-vuitton-building-ireland-bailout-nama
As I mentioned on a separate string some 10 days ago, David Daly has done a deal with a white knight to extricate his portfolio from NAMA. And it wasn’t Deutsche bank, although they were there for him right to the end. The moles say the deal was made – and approved – directly with John Mulcahy. First of the real portfolio deals. Expect to see more over the next six months.
@WSTT, ah g’wan! Given that the assets included some prime London property in the €350m 17-20 Bond Street property, then the portfolio would be a reasonably safe bet that probably wouldn’t have attracted the likes of BlackRock, Blackstone, Apollo, Lone Star, Carlyle group who will have been looking for bargains. Presumably none of the Irish banks bought the portfolio, though Bank of Ireland is probably becoming a little more ballsy. Barclays is funding purchases, and I note they were behind the financing of the Maybourne loans purchase by the eponymous Barclay twins. But beyond Barclays what traditional UK source of finance would shell out what? €400m+?
@NWL, I was told source of finance was not traditional. Not in a position to confirm funding partner just yet….. maybe tomorrow?
@WSTT, I don’t suppose LVMH might have decided to secure its London flagship and take on the “lucky bag” that is the rest?
@NWL, That would be my guess, but I would like to confirm it…
@NWL, … the balance of the “lucky bag” may find its way back home in Santa’s bag, I would have thought!
LVMH purchased the Bond Street properties for €300 million, thereby reducing the Irish LTVs making them bankable.
@WSTT, €300m or GBP 300m (roughly €358m at current exchange rates)? When you say the Irish properties are “bankable”, are you suggesting the loans have changed hands. Reports of sales in the past 24 hours seem confined to the three New Bond Street properties – 17-20 New Bond Street (the Louis Vuitton flagship London store), 40 New Bond Street occupied by the Smythson store and next door 41 New Bond Street, occupied by the Coach store.
There are lies, damn lies … and then there is NAMA spin. Neither David Daly nor his wife Mary returned any jewelry or cash as per this latest piece of spin by NAMA trying to influence public opinion.
http://www.irishtimes.com/newspaper/finance/2011/1220/1224309292420.html
LVMH bought the Bond Street properties for £300 million and David Daly refinanced the balance of the AIB and NAMA loans out completely. He’s free and clear of them…. complete with Mary’s money and Jewelry.
@WSTT, so NAMA recovered 100% of its loans which it acquired from AIB. That’s surely a result – wasn’t Deutsche Bank going to acquire the loans some time back from AIB/NAMA at a discount? Of course given the secrecy imposed on (and mostly welcomed by) NAMA and its refusal to discuss individual loans/properties/developers, we’ll probably never know if the Agency has racked up a major success.
Lads, the Indo apology yesterday makes for interesting reading!
http://www.independent.ie/national-news/david-daly-and-family-apology-3355795.html
Does anyone know how much (if any) compo got paid over? Tried to google it but there’s nothing much online.
@CSPAN, according to the Court Service, the case in the High Court – case reference 2012/12802 P where Mary and David Daly are together suing Independent News and Media for libel (according to today’s Phoenix Magazine) – has not yet been concluded. The application is dated 18th December 2012 and the Dalys are represented by top-tier solicitors, LK Shields
LVMH loan was bought by NAMA at £200 million. So, yes. a good result for NAMA.
Sorry, that should have read £220 million (not £200 million)
@WSTT, of course AIB will be nursing some loss (not necessarily GBP 80m – there was surely some equity left in the New Bond Street properties) and there will have been the valuation, due diligence and other administrative costs which will ultimately be borne by the State in one form or other (AIB 93% owned by the State or NAMA).
But separating NAMA’s performance out from the mix, it looks as if the Agency has scored another bullseye (the Maybourne loans sold at face value was also apparently a bullseye in that €800m was the absolute maximum that NAMA could theoretically have achieved).
We seem to have well-established methods for meting out criticism to NAMA – it must be one of the few organisations where no-one (shareholders, government, media, suppliers, customers) can actually give them a pat on the back and say “well done”.
@NWL that’s called a salary and yeah they did their job.
Out off 70 billion in lending a few would be expected to trade at par.
Trophy one off French billionaire who wants to own his own “house” and a “couple” of eccentric reclusive brothers who likewise “enjoy” owning trophys.
In some ways unfortunate,long time before this quality of asset is in Irish ownership again.But like you said NAMA does not appear to have lost any money here,phew.
If they lost money here…. they’d have no chance at home. This was a huge trophy asset. Coveted worldwide.
At least no fees,the buyer was bird in hand.Logical straightforward deal no brainier really,the receiver would not get paid here or any agents,assume the tenant was excluded in any fee negotiations.