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Archive for December 21st, 2012

No sign of any let-up in NAMA’s foreclosure activity as we enter the Season of Goodwill. Today’s Iris Oifigiuil reveals that the Agency has had receivers appointed to some assets owned by two related Cork property companies.

On 17th December 2012, NAMA had Aiden Murphy of Crowe Horwath appointed receiver to certain assets – not specified in today’s Iris Oifigiuil – on foot of lending originally from AIB, to the following two companies:

(1) Kivazza whose directors are Roy Murray (42) and Donal Crowley (55). The company is 100%-owned by Coleman Brothers (Developments) Limited.

(2) Coleman Brothers (Developments) Limited whose directors are Roy Murray (42) and Donal Crowley (55) and is owned by John Coleman (50, 50%) and Michael Coleman (51,50%)

Although the assets to which receivers have not been specified, the Colemans are perhaps most associated with the €650m Stoneview development of 1,500 homes and retail park, which stalled in 2009.

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

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Minister for Communications, Energy and Natural Resources Pat Rabbitte rocked the boat a fortnight ago when he appeared to adopt a unilateral position in saying that the next €3.1bn instalment due in March 2013 by the State to what was Anglo Irish Bank in respect of the promissory notes “would not be paid”. Mind you, he said in the next breath that we didn’t pay the last instalment in March 2012 which reversed much of the hope that developments were afoot. [Note to Government: we did pay the promissory note last March 2012 in the same way we paid Gardai and nurses last month from a pool of taxes and borrowings; we borrowed the cash to pay the promissory note last March, just as we partly-borrowed the cash to pay Gardai and nurses last month]

Since then, the Government has been all at sea, not knowing if it should be claiming the debt is sustainable or unsustainable and the talk of technical reengineering is becoming very stale indeed – after all, we have been hearing claims of progress since September 2011 framed around the same niggling phraseology.

Yesterday in the Dail, the Fianna Fail finance spokesperson Michael McGrath asked the Minister for Finance Michael Noonan straight out – would the promissory note be paid in three months time. The response from Minister Noonan was unhelpful, but there was the admission from the finance minister that the payment would be “very difficult”. It’s not much, but it’s more promising than An Taoiseach’s harsh rejection of the notion of debt relief stridently declaring we won’t have defaulter stamped on our foreheads.

The great and the good involved in, and on the periphery of the negotiations with the ECB seem convinced that some progress is expected, and it is likely to be in the shape of a much longer repayment period to deal with the infernal promissory note. It remains unclear however if any actual reduction in the overall debt burden will come about through the negotiations, as the ECB is prevented from outright concessions and it risks an avalanche of requests from other EuroZone countries seeking similar treatment to Ireland.

The full parliamentary question and response are here:

Deputy Michael McGrath: if, in the absence of an agreement with the European Central Bank to restructure the liability, it is his intention to pay the €3.1 billion due to the Irish Bank Resolution Corporation on 31 March 2013 in respect of the promissory note

Minister for Finance, Michael Noonan: I have previously stated that I am working to try and achieve a solution before the next scheduled instalment on the Promissory Note scheduled for next March. It would be very difficult for Ireland to make a payment on that date and so we continue to work on a deal with our European partners. I remind Deputies that the Government, together with all other 26 member states at the Euro Summit in October last year committed that:

As far as our general approach to private sector involvement in the euro area is concerned, we reiterate our decision taken on 21 July 2011 that Greece requires an exceptional and unique solution. All other euro area Member States solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms. The euro area Heads of State fully support this determination as the credibility of all their sovereign signatures is a decisive element for ensuring financial stability in the euro area as a whole.

The Irish Government will honour this commitment and will ensure that we work with our EU partners to address the situation in relation to the overall cost to the State of resolving the difficulties in our banking sector. This Government has consistently worked towards a consensual approach to decisions made with our European colleagues.

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The recent return to the family firm, by NAMA asset manager Kevin Nowlan has raised concerns that the former NAMA insider may now be in a position to exploit his detailed knowledge acquired in the bowels of NAMA. Kevin has returned to WK Nowlan and Associates where his father, Bill Nowlan remains active. The company is understood to be growing it asset management and advisory business and the concern is that knowledge acquired by Nowlan junior at NAMA might be used in a manner that gives WK Nowlan or its clients an unfair advantage in dealings with NAMA or with NAMA developers.

One specific concern is WK Nowlan’s work in valuing Treasury Holdings UK portfolio of property and there now appears to be a concern that Nowlan junior is in a position back in the private sector surroundings of the family business to use both NAMA insider information and WK Nowlan insider-information on Treasury’s properties, to secure an unfair trading advantage. No evidence has been produced to elevate that general concern.

This week in the Dail, the Fine Gael backbench deputy for Mayo, Michelle Mulherrin asked the Minister for Finance Michael Noonan a series of questions about Nowlan junior and the family business. Minister Noonan refused to confirm or deny if Nowlan junior had recently left NAMA to return to the family business, but thankfully, the Irish Times did confirm exactly that recently. We then had Deputy Mulherrin asking about the work undertaken by WK Nowlan with valuing Treasury’s UK portfolio, and herein lies a problem – NAMA engaged Deloitte to examine Treasury’s business plan but Deloitte seemingly subcontracted some work to WK Nowlan, and NAMA says that this subcontracting relationship between Deloitte and WK Nowlan has practically nothing to do with it. Though to anyone with half a brain, it should indeed be something of concern that the Agency potentially lost control over information and conflicts of interest in subcontractor relationships.

Deputy Mullherrin also asks if there is presently a conflict of interest between Nowlan junior’s former role in NAMA and the work currently undertaken by WK Nowlan on Treasury’s portfolio. This gets a little confused because at this stage, you would expect WK Nowlan’s work on Treasury’s portfolio to be at an end, but there is plainly the potential for WK Nowlan to have an unfair advantage in any dealings or consultancy with Treasury property. WK Nowlan can be assured that its dealings with NAMA property or property associated with debtors of NAMA, will be scrutinised very closely.

The full parliamentary questions and replies are here.

Deputy Michelle Mulherin: if a person (details supplied) has left the National Assets Management Agency to take up employment with their previous family business; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan: The National Treasury

Management Agency (NTMA), which assigns staff to NAMA, does not comment on individual employees.

Deputy Michelle Mulherin: if a company (details supplied) has won the contract to value Treasury Holdings UK and Irish assets on behalf of the National Assets Management Agency; if so, the value and the duration of the contract; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan: I am advised by NAMA that there is not, nor has there been any such contract between NAMA and the firm concerned. NAMA advises that the Deputy is most likely referring to the Independent Business Review (IBR) that was carried out in respect of all debtor business plans from 2010. NAMA advises that Deloitte was one of a number of firms appointed, following a competitive public procurement tender process, to its IBR panel and that in June 2010 Deloitte was selected from this panel to independently review the Treasury Holdings business plan. NAMA advises that Deloitte completed this work in October 2010. NAMA advises that, as with any other IBR firm, it was a matter for Deloitte to determine where they sourced the property expertise required to complete the assignment. Typically, the input required from property specialists in IBR assignments was to comment on the debtor’s asset strategies as submitted in the draft business plan and to put forward their own expert views on asset strategy and the optimal timing of any proposed sales. NAMA is satisfied that Deloitte had sufficient property expertise available to them to complete this assignment in Ireland and overseas and understands that they engaged separate property advisors for each country. Any property expertise employed by Deloitte involved a contractual arrangement between them and the two separate property advisory firms concerned and NAMA was not a party to such contracts. The fee payable by Deloitte to secure such expertise was a matter between them and the firms concerned.

Deputy Michelle Mulherin: his views on whether a conflict of interest exists when a person (details supplied) joined the National Assets Management Agency as a portfolio manager in March 2010 has now left NAMA to resume work with their family firm which has won a lucrative contract to value Treasury Holdings UK and Irish assets on behalf of NAMA; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan: NAMA advises me that, given its remit under the NAMA Act, it must recruit staff with the requisite experience and expertise and that it would not therefore be possible to recruit only officers who have not worked with firms on NAMA panels. The key issue, however, is that NAMA takes steps to ensure conflicts of interest do not occur. Under Section 42 of the NAMA Act, before he or she is assigned to NAMA, each officer is required to provide a statement of his or her interests, assets and liabilities to the Chief Executive Officer of NAMA and the Chief Executive of NTMA. Furthermore, a key item for any NAMA evaluation group for procurement of services is a declaration by each member that they have no conflict of interest. NAMA advises me that this enables the Agency to ensure that potential conflicts of interest in the management of the loan portfolios are managed effectively; and that staff do not participate in decisions which may involve the allocation of work to companies for which they worked previously.

I am satisfied that NAMA have procedures in place to avoid conflicts of interest.

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Moira McNamara sues NAMA

There is no let-up in litigation as we enter the Season of Goodwill with Moira McNamara yesterday filing an application in Dublin’s High Court against NAMA. Alas, we don’t definitely know that this “Moira” is one and the same as the wife of NAMA Top-10 developer and UK bankrupt, Bernard McNamara, whose wife is also “Moira”.

Moira McNamara is represented in her High Court action by Gore and Grimes solicitors and the defendants, formally National Asset Management Agency and National Asset Loan Management Limited don’t yet have a solicitor on record, which is normal with recently-filed applications. The case reference at the High Court is 2012/13015 P.

It was the 6th September 2012 when we learned that NAMA had sued Bernard McNamara (solely) in the High Court and it was at the start of November 2012 when we learned that Bernard has been declared bankrupt in London. It’s been a busy year for the Clare developer with news of new business in Nigeria as well as family business developments in London.

As this is Ireland, we cannot obtain any further information on the application at the High Court, so we don’t know the subject of the application or remedies sought. We can’t even confirm the identity of the applicant.

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