I mean what’s the problem? A Limerick developer is offering to pay off a €86.5m judgment to NAMA at the rate of €1,000 per month, which in a mere 7,208 years should see the debt totally cleared, ignoring additional interest of course.
And yet still, NAMA is pursuing Michael Daly, of Fordmount fame, over the transfer of his share in the family home to his wife in 2009 and the sale of assets – which were reportedly previously valued at €11m – for a mere €2.
And before you think that Michael transferred his share of the family home to his missus to deprive his creditors, think on. Not only is Michael claiming that he executed the transfer out of “natural love and affection” but Michael even obtained a declaration of solvency from a firm reportedly founded by former colleagues of Michael at Grant Thornton. That firm, referred to yesterday as the HDS Partnership – which appears to be a Limerick firm whose partners are Dara Smyth, Eddye Duffy, Louise Matthews, Gearoid Flannery and John Hinchy – is also said to have audited the Fordmount Group, Michael’s property group.
And before you chortle that there must be something fishy about this, because surely in 2009 it would have been apparent that the game was up for the property industry, again think on. Remember PwC, E&Y, Deloitte, KPMG and Jones Lang LaSalle were engaged by the Department of Finance at the end of 2008 and start of 2009 to examine the state-guaranteed banks’ loan book and failed to predict the scale of losses which we eventually shouldered. Take a look at the €6m of invoices from these fine firms, and then bear in mind the ultimate gross cost of €70bn of bailing out the banks. The HDS declaration of solvency might be presented in a poor light in today’s reporting in the Irish Times, but far, far bigger firms got their valuations and declarations badly wrong when compared with subsequent losses.
I mean if John Mulcahy’s Jones Lang LaSalle was unable to predict the scale of future losses in late 2008 and the start of 2009, then how can NAMA, who today employs John as a board member and its most senior property man, criticize the declaration of solvency prepared by the Limerick firm of accountants in 2009.
And as for the sale of multi-million euro assets in a German company for just €2, the Irish Times reports “The shares sold had no value and the supporting assets were still in place, he [Michael] said.” So, on the face of it, the sale might sound fishy but in the property business, there were substantial collapses in values and if the German firm was a property company, then assets that were “previously valued at €11m” could well be worthless.
Michael was in the Commercial Court before the redoubtable Judge Kelly yesterday where NAMA successfully sought permission to examine Michael before the court over his financial affairs and dealings. The Judge, whilst noting that Michael had already provided substantial documentation and had been intensively examined by NAMA’s solicitors, still granted NAMA its application noting that NAMA had a very low threshold of argument to overcome to win the examination.
The upshot is that we will have a day or two of examination of Michael by NAMA before Judge Kelly in April 2013. Other developers will be watching these proceedings intently because they are likely to be repeated a number of times in future in other cases.
[Credit to Mary Carolan in the Irish Times today whose report is the basis for the above blogpost. Mary reminds us that in the original judgment which saw €86.5m awarded against Michael Daly, the judge dismissed the claim that when the loans were originally provided by Anglo, that Anglo had provided "oral assurances from Anglo executives that personal guarantees provided by him over loans were secondary to security taken by the bank and would never be relied upon"]
UPDATE: 1st May, 2013. NAMA is back in the Commercial Court division of the High Court this week. Today, the feature appears to have been a €300,000 payment by Michael to his wife