Earlier this week, we learned that a NAMA developer, Holtglen, was pursuing a legal action to have the mighty Dunnes Stores wound up on foot of an outstanding judgment relating to a Waterford shopping centre of €21m. Holtglen is insolvent and is being supported by NAMA and it was revealed that Dunnes Stores Margaret Heffernan had been writing to NAMA trying to stave off the winding-up petition. NAMA is having none of it, and wants its money – if Holtglen was an IBRC borrower then Dunnes might have been more successful. The winding up petition is set to be heard on 14th December 2012.
Yesterday, we learned via The Phoenix magazine – subscription required – that in Tallaght, west Dublin, the management company for The Square shopping centre is pursuing Dunnes for €800,000 of allegedly outstanding service charges. Dunnes is one of the anchors of The Square, a mid-market shopping centre opened in 1990.The management company, The Square Management Limited is seemingly controlled by solicitor and property developer and erstwhile art collector, Noel Smyth – now resident in London, apparently – and The Phoenix reports that NAMA has acquired loans provided to Noel Smyth’s company. Given the management company has accumulated losses of €15.5m according to The Phoenix, it would seem that the hands of NAMA will be all over this legal action which was initiated on 7th September 2012 – reference 2012/9067 P. The case appears set for hearing in January 2013.
According to the Courts Service, The Square Management Limited is represented by Noel Smyth and Partners, and Dunnes is represented by Arthur Cox. Lastly The Phoenix reports that Dunnes was told, presumably by a judge, that it needed to pay up €400,000 now in advance of the substantive hearing.
So, it seems that NAMA has extra incentive to play tough with Dunnes. It is interesting that Dunnes is represented by Arthur Cox, a company revealed on here yesterday as being No 4 in the league table of payments to solicitors by ….em, NAMA in 2012. No wonder Irish people have a reputation for being builders – given all the Chinese Walls we’ve constructed at so-called “professional firms”, it’s a wonder we have any competition globally in the construction business, at all.
I was shocked to see that there were about 80 applications in Dublin’s High Court against Dunnes Stores in 2011 and this year, the outlook for annual volume of applications is similar. Mind you, Tesco appears to be on the receiving end of a similar number of applications.
UPDATE: 3rd December 2012. In an unrelated case, the judgment in the case taken by developer and promoter Harry Crosbie and his Point Village development in north Dublin Docklands against Dunnes has now been published by the Court Service here. There’s a summary from the Irish Times here. A further summary is Harry partially won his case, but he needs find some more tenants for the Point Village before he can compel Dunnes to fulfil their part of the contract.
@NWL
Dunnes again!. What was that Oscar Wilde said!
Related topic.
One of the big issues facing banks etc who are considering whether to foreclose on companies is how collectible the debts become after foreclosure.
The bottom line is that however slow debtors were paying before receivership, after receivership/liquidation they simply will not pay, because they feel they will get away with it.
Some may argue issues such as ‘who will provide warranty /service etc’ , but the reality is that liquidation/receivership is a great opportunity to duck out under the fence. At this point debts due on liquidation/receivable are virtually uncollectible.