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Archive for the ‘Developers’ Category

Table of the Week

EurostatGDP 

This week, the European statistics agency, Eurostat published the latest GDP data for the EU and selected non-EU countries. Nine of the 27 EU countries are clearly in recession with two successive quarters of negative GDP growth, but as we know on here, Ireland too is in recession because although its change in Q4,2012 was officially logged as 0.0% or -0.0%, it is actually -0.047% which confirms a second quarter of GDP contraction.

Salaries of the Week

HowMuchCompetitionAuthority

This was the week that we learned the last accounts for the Irish Film Classification Office were for 2009 and that subsequent accounts hadn’t been filed “due to an oversight”. We learned this week that the latest accounts filed for Ireland’s woeful Competition Authority were for 2010 and are available here. No word on subsequent years. We learned that the average salary for the 46 staff in the Competition Authority, comprising four board members, 38 staff and four secondments from other Government departments was an impressive €68,600 in 2010. Furthermore, the relatively small operation ran up unspecified – no, not building or travel or printing or advertising – administration costs of €139,000 and IT costs of €104,000. Overall, the operation cost us €4.4m in 2010. Its outputs are less impressive, it certainly deals with notifiable mergers but I cannot see evidence of robustly rejecting a merger, ever. There are a tiny number of prosecutions for competition infringements, and yet, we continue to live in a State where medicines are several times more expensive than in the neighbouring jurisdiction, our lawyers are still the second most expensive in Europe after Moscow, our recession-racked economy still tolerates €500-1,000 per hour payments to professions. And don’t even get me started on consumer goods, from groceries to mobile phones.

Quote of the Week

“It really does make me ashamed of my government when they can get wages in the hundreds of thousands annually, but when one of the most important children’s wards in Ireland, for some of the sickest kids in Ireland, has to rely on charitable donations to buy a bucket of paint and a brush. That is one of the sickest things I have ever come across in my short lifetime here” 16-year old Kerry man Donal Walsh who lost his fight with cancer last weekend – in his own words he wrote about dealing with cancer, they’re worth a read here and here.

Rubbish of the Week

A month ago, amid widespread illegal dumping in the Gardiner Street area of Dublin, Dublin City Council was threatening not to collect rubbish from certain areas of the city and let the residents resolve the problem of illegal dumping themselves; how, wasn’t clear but it had hints of a call for vigilantism but in the end, DCC abandoned that hare-brained scheme but have now introduced another – over a week ago, they confirmed they were writing to local authority tenants demanding proof that they had paid for a waste disposal provider. And it seems DCC is even proposing to extend this new scheme to allow its officials knock on anyone’s door to demand proof of having engaged a provider.

Curse of Dragons Den of the Week

DBImageTwitter

The “curse of Hello” where full colour splashes of celebrity lives in the pages of Hello magazine, only to be soon followed by banana skins, revelations of peccadillos and tragedy, seems to have spread to the Dragons Den, the Japanese TV format created which was picked up by the BBC and latterly by RTE. In Ireland, we have seen Dragons Bill Cullen’s motor dealership and hotel operation fall from grace, and more recently Niall O’Farrell’s chain of formal wear and suit hire shops fall victim to the ongoing recession. In the UK this week, the Daily Mail suggested that one of the stars of the UK version of the show, Duncan Bannatyne was facing money troubles, though the scrappy Scotsman was quick to tweet that the Daily Mail story was untrue.

Table of the Week

OpennessIndex

This week, the NTMA produced its monthly “Ireland has turned the corner” presentation to investors with its laughable spin on an economy still in recession, with 14% unemployment, with retail sales declining (fast), with commercial property rents and capital values declining, with residential property declining, the NTMA still manages to appear positive. Its openness proxy is a good one – this adds together exports (X) plus imports (M) and divides the sum by GDP. In Ireland’s case, we are amazing compared to the other PIIGS, but this ignores the massive in/out flows from multinationals which is a unique feature of the Irish FDI-focussed economy. Anyway, good to know residential property rose for the first time since 2007…..

Old Media swan song of the Week

“Sarah McInerney of The Sunday Times acknowledged that the online version of that newspaper’s Irish edition which she said was known within the company as the “regional edition”, was “not doing well”.” So reported the Irish Times this week

We also had UTV’s management statement for Q1,2013 which noted that its commercial radio operations in Ireland (north and south) were down 8% in Q1,2013 compared to a year previously. That’s a worrying decline for a company that is well regarded commercially but more worrying was the statement “We believe  that we continue to outperform the market” which doesn’t bode well for competitors here, particularly RTE and Communicorp (Newstalk and Talk amongst others) and Landmark Enterpises (the Crosbie vehicle that has taken on the operation of local radio interests previously managed by TCH).

We also had Johnston Press’s management statement for Q1,2013 – you might ask where are the statements for Irish-owned companies but apart from IN&M indicating revenues were down 10% this year on last, we haven’t heard a mig from our own. Johnston Press publishes 12 local titles in Ireland – Donegal Democrat, Donegal People’s Press, Dundalk Democrat, Leinster Leader, Leinster Express, Leitrim Observer, Longford Leader, Kilkenny People, Limerick Leader,  The Nationalist and Munster Advertiser, Tipperary Star and The Echo in Tallaght. Although total revenues were down 11.4% in Q1,2013 from a year previously, it seems the decline is concentrated on advertising and that circulation revenue had held up.

Resemblance of the Week

ItsUncanny

Colourful Independent TD for Roscommon, Luke “Ming” Flanagan turned up at the Dail this week, a-la-Paris Hilton, with a tiny dog in tow. Julie, which could be a Scottish Terrier but could be some lovable Roscommon-Leitrim mongrel. Perhaps one of these days, the old media might run a feature of politicians and their dogs to judge if owners indeed chose dogs in their own reflection.

Parliamentary insult of the Week

SamuelJacksonImpression

“In truth I have to say that I am fed up to the back teeth with the foot dragging, the whinging, the stalling; sometimes, you might even say the attempt to politically posture on critical issues such as this; the begrudging, the bellyaching that you hear, the conditioning before statements can go out from colleagues. And I’m depressed listening to a tribe of Jeremiahs that infest the political process  and whose first thought is to attack any genuine attempt that is made for positive proposals. And those people of course have nothing to contribute themselves. And I also have to say that I get glum at the whited sepulchers who pontificate to us about a shared society and talk to us about harmony and consensus politics and yet, unless they are taking the lead themselves and are taking everything they want, they strain and stretch every sinew to abstain and obstruct what is going on. And quite honestly Mr Speaker, I think we have reached the stage that if we wait for the last person to board the train, the train will never leave the station“ Peter Robinson, First Minister of Northern Ireland, in the Stormont Assembly responding to criticism of the joint Sinn Fein/DUP “Together: Building a United Community

Let’s hope Peter’s grasp of the political challenges facing Northern Ireland is better than his grasp of the Good Book. The prophet Jeremiah may well have forecast doom-and-gloom but as it turned out, his predictions were accurate. And a day or two later, the TUV picked up on this when they issued a statement

“Yesterday the co-First Minister branded his critics in the Assembly “a tribe of Jeremiahs”. The image struck me as an exceptionally odd form of insult, particularly as the warnings proffered by Jeremiah proved to be accurate. Given the traffic chaos which is developing at the Maze it is obvious that the warnings of some Jeremiahs have been well founded.”

Tax Home Truth of the Week

“The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing” Jean-Baptiste Colbert, finance minister under Louis XIV in 17th century

Okay, it’s not new but the general absence of hissing over the property tax – yes, there have been a few marches, a handful of occupations but the indications from the Revenue Commissioners is that the tax has been accepted far more widely than its predecessor, the household charge. This time around, the Government has firmly passed responsibility for the tax to the still-generally-feared Revenue Commissioners, it has a 50% discount in place for 2013 and despite it being a deeply unfair tax in many respects, it seems as if it is on track to be accepted by a considerable majority by the filing deadline – 28th May 2013.

Act of Transparency of the Week

In Uganda, a country with a land area three times that of Ireland, and a country to which we provide foreign aid, this week, they achieved a fully computerized Land Registry showing who owns what.  Amazing. In Ireland, we haven’t quite registered all property yet, and there is a sizable amount, particularly in south county Dublin, apparently, that has yet to make it online. So, you just have to wander up to the dusty Public Records Office on Constitution Hill in Dublin and pay your €15 for a photocopy.

Whitewash of the Week

NotCorruptUntilBlueInTheFace

The vehement disdain towards the “anonymous author” that blew the whistle on Garda malpractice in quashing traffic penalty points, was not well disguised. Nor was the anonymous author whom we’ve all known for some time was John Wilson. The report itself is here and there is a lengthy additional report on what the Garda practices are. Heads are still being scratched at how seven separate notices being quashed for the same family didn’t rise to the level of corruption. But mostly we wanted to know why the Gardai were investigating themselves when we have a perfectly good Garda Ombudsman set up for such investigations. Three Gardai face disciplinary action, the report will now be examined by the Oireachtas justice committee but the Garda Commissioner and Minister for Justice Alan Shatter are desperate to draw a line under the whole affair and calls by Transparency International for better protection of whistleblowers seem to have fallen on (the) deaf ears in Officialdom.

Response to debt demand of the Week

VewyVewySorry

And finally, Clare Dooley whose Twitter profile says she assists people suffering in the economic downturn provides a novel approach to demand letters from the banks.

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“Additional financing to existing borrowers: The merged entity may not provide additional financing which is not contractually committed at the time of the approval of the joint restructuring plan (in line with the commitment referred to in point (ii)).” European Commission decision on 29th June 2011 on the run-down of Anglo and Irish Nationwide

There is no development at the High Court in respect of Paddy McKillen’s (and Denis O’Brien’s) application for an injunction against the Sunday Times and its reporter, Mark Tighe – there are no new filings and we are now well past the six weeks which was intimated would be the full hearing date when the partial injunction was obtained by Paddy at the end of March 2013. The Sunday Times has in recent weeks provided some additional reporting of the general matter subject to the injunction, and it seems one of the details is that Paddy sought what was described by the Sunday Times as an emergency loan approval last October 2012 to pay some of the €25m estimated legal fees which Paddy was ordered to pay when he lost his High Court challenge against the Barclay brothers.

The Sunday Times reported that Paddy sought approval for a [CORRECTED] GBP 5.0m (€6) – the Sunday Times refers to a GBP 5m (€5.9m) loan in one part of the story and a [CORRECTED] GBP 5.9m legal fees bill elsewhere [CORRECTION: the loan sought was €5.9m but the legal fees bill that was falling due to be paid was GBP 5.9m, in other words, Paddy was seeking a loan for just part of the legal fees bill] – loan to pay the legal fees that he was required to pay on account, pending the appeal of the decision, the outcome of which we’re still eagerly awaiting. The Sunday Times reported that the board of IBRC – remember Mike Aynsley was then CEO and Alan Dukes was chairman – approved the loan. According to Paddy, he eventually decided to fund the [CORRECTED] GBP 5.0m element of the GBP 5.9m legal fees from elsewhere.

All well and good.

But it seems that there is now an issue regarding the decision by the IBRC board to approve the loan to Paddy, even if Paddy didn’t eventually draw it down. IBRC operates under rules imposed on it in June 2011 when the European Commission approved an orderly wind-down of IBRC. One of the terms of the decision by the EU is that

“Additional financing to existing borrowers: The merged entity may not provide additional financing which is not contractually committed at the time of the approval of the joint restructuring plan (in line with the commitment referred to in point (ii)).”

Point (ii) states

“Ban to develop new activities and to enter new markets: The merged entity will not develop any new activities and will not enter new markets, that is to say that the merged entity will not carry out any activities other than those that are consistent with managing the work-out of the Anglo and INBS legacy loan book (including loan sales, where appropriate, to maximise recovery values). In particular, the merged entity will maintain and use its banking licence only as long as necessary for the work-out of the loan portfolios and will not use it to develop new activities. […].”

In the Dail this week, the Sinn Fein finance spokesperson Pearse Doherty asked Minister for Finance Michael Noonan if IBRC breached these rules in approving a €5m (sic) additional loan to Paddy. Minister Noonan, whilst citing the European Commission decision overall, says that he is “not aware of any breaches by IBRC of the Commitments contained in that decision.”

The parliamentary question and response is here.

Deputy Pearse Doherty: asked the Minister for Finance his views on whether the Irish Bank Resolution Corporation breached the terms of its Commitments Letter to the European Commission by issuing a further €5 million loan to a person (details supplied) in 2012 to pay legal costs, when their debt with IBRC amounted to approximately €900 million in personal and corporate accounts at the time. [23153/13]

Minister for Finance, Michael Noonan: I am advised by the Special Liquidators that they are not in a position to comment on individual cases. The information requested is confidential and it would not be appropriate for the Special Liquidators to release such information.The terms of the European Commission Commitments letter are contained in the Commission Decision of 29.06.2011 and published at –

http://ec.europa.eu/competition/state_aid/cases/235764/235764_1251125_112_6.pdf

I am not aware of any breaches by IBRC of the Commitments contained in that decision.

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GayleNoticeParty

According to the US court service, PACER, there have been 52 filings so far in Sean Dunne’s bankruptcy in Connecticut – the betting is that by the time this bankruptcy is resolved there will be a multiple of 52. Yesterday’s filing is by Sean’s wife, who is now styled “Gayle Killilea Dunne”, not Gayle Killilea and not Gayle Dunne. Gayle’s request is to be recognized as a notice party in the bankruptcy under Rule 2002 and Rule 9010 of the Rules of Bankruptcy Procedure. Rule 2002 applies to “Creditors, Equity Security Holders, Administrators in Foreign Proceedings, Persons Against Whom Provisional Relief is Sought in Ancillary and Other Cross-Border Cases” and requires the applicant to be treated as notice party to the bankruptcy proceedings. Rule 9010 appears to simply allow the notice party to be represented by a lawyer.

Gayle has engaged Connecticut law firm Reid and Reige and her specific lawyer is Eric Henzy, described on his bio at the firm as practicing in “business bankruptcies and workouts and business and commercial litigation”.

It should be stressed, if it isn’t apparent already, that it is only Sean Dunne who has filed for bankruptcy; by all appearances, Gayle’s finances appear to be hale and hearty and she is financially separate from her husband. It should also be stressed that there is no separation or divorce proceedings chez Dunne, and Gayle’s Irish solicitors, Clerkin Lynch have made that clear this week, though that story appears no longer to be online. [CORRECTION: the Sunday Times story is accessible here]

The application is here.

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This afternoon in Dublin’s High Court, Mr Justice Iarflaith O’Neill ruled in favour of the colourful Johnny Ronan’s landlord company in a case against the tenant, the Irish Medical Council. Johnny’s company, Tanat Limited, co-owned with Kildare developer Peter Conlan had claimed that a lease on a property,  Kingram House  off Fitzwilliam Square pre-dated February 2010 when Upward Only Rent Review clauses were outlawed. Although the lease was technically entered into after February 2010, the judge today ruled that a series of exchanges in 2008 were sufficient to establish the existence of a lease then.

So great news for Johnny who will see the rent maintained at €820,000 even though the evidence shows the current market rent for Kingram House today would be €374,100.

The judgment from today is not yet online.

Elsewhere the Court Service indicates that there has not yet been any appeal by Johnny’s company Ickendel against a High Court ruling which saw Bewleys Oriental Cafe win the right to a current market rent rather than the 2007 rent which had been imposed on it. NAMA might have been called on to fund the appeal, and it might be the Agency decides to let this litigation pass. Last year. Johnny lost control over many of his prized assets when NAMA had receivers appointed to Treasury Holdings companies and subsequent attempts by Johnny to have the receivership overturned were unsuccessful. And more recently the Treasury Opera CMBS is ending up in the hands of investors who bought underlying loan rights.

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Take Paddy McKillen, pictured below right.

DrownedAndSaved

In 2010 and 2011, he fought tooth-and-nail in Dublin’s High Court and Supreme Court to stop NAMA acquiring his loans. In the end, the Supreme Court judges decided that NAMA could acquire Paddy’s loans but would have to consult with him beforehand. Despite swearing blind at the High Court that Paddy’s loans were “systemic”, NAMA abandoned the fight and decided not to acquire Paddy’s loans which remained at IBRC and Bank of Ireland.

Lucky for Paddy.

Because right now, Paddy has been given a window to refinance his IBRC loans – estimated to be €300m of personal loans and €550m of corporate loans. To refinance his loans, Paddy must repay them 100% and Paddy has been having a whinge through the press recently that IBRC is not accepting his most generous offers which are almost equal to what Paddy owes. Paddy’s window to refinance at 100% expires soon; originally, the liquidator at IBRC was going to have the loans valued by the end of May 2013 and they would then be offered to the market, unless they had been refinanced at 100%. That valuation of the IBRC loans by USB and PwC due at the end of May, seems to have slipped but regardless, it will be a matter of weeks when the un-refinanced loans are offered to the market.

Why is Paddy lucky? Because, even after his refinancing window closes, he will be able to bid for his own loans, and if his bid is the highest and if the bid is in excess of the independent valuation, then Paddy will be able to acquire his loans at a discount. So IBRC into which we have shoveled €34bn will be selling its loans to the market, and if the borrower is the highest bidder for those loans then the loans will be sold to the buyer at a discount, or in other words, the borrowers will receive debt forgiveness or a debt writedown.

To illustrate, if Paddy has personal loans of €300m today, he can refinance these today at 100%, that is pay IBRC €300m and any outstanding interest and fees. After the refinancing window closes, then IBRC will offer Paddy’s loans to the market and say the highest bid is €200m and this is in excess of the market value of the loans, then they will be sold to that bidder regardless of who that bidder is. If it’s Paddy, then he gets €100m of debt forgiveness, no questions asked.

Contrast that with NAMA which is prevented by the NAMA Act from selling assets back to debtors below their par values. So, if a NAMA debtor owes NAMA €300m and offers NAMA €200m for them, and if NAMA markets the loans and €200m remains the highest bid, then NAMA can NOT sell the loans to the NAMA debtor. Which brings us to Sean Reilly (pictured top above, left) who happens to owe NAMA about €300m according to press reporting. Sean is prevented by the NAMA Act from having an interest in buying these loans. The best Sean can do is show some leg to potential investors and try to get them interested in bidding for the loans, and the best Sean can hope for is to act as a consultant after the loans have been sold to someone else.

Minister for Finance Michael Noonan is clueless about all of this, he doesn’t know how much the NAMA proscription is costing NAMA and by extension the State. He also doesn’t know why there is one rule for IBRC disposals and another entirely for NAMA’s.

What an eejit, and given he is being advised by the Department of Finance on these policies, what a bunch of eejits are employed there.

The Minister was responding to a parliamentary question from the Sinn Fein finance spokesperson Pearse Doherty. The response must count amongst the most nonsensical you’re ever likely to see.

Deputy Pearse Doherty: To ask the Minister for Finance the reason the Irish Bank Resolution Corporation borrowers will be eligible to buy their own loans at less than par value when such loans over €10m are offered to the market imminently, but that borrowers at the National Asset Management Agency are precluded by the NAMA Act from buying their own loans at below par value..

Minister for Finance, Michael Noonan: As previously advised, independent third parties are being engaged to independently value the loan assets of IBRC (in Special Liquidation). There is an obligation on the Special Liquidators to ensure that assets of IBRC are sold at a price that is equal to or in excess of the independent valuations that are being obtained. A process is currently being finalised that ensures that maximum value is extracted from the loan sales. The Special Liquidators are responsible for putting in place a liquidation process which fulfils their obligation under the IBRC Act and where applicable the Companies Acts.  It is a matter for the Special Liquidators to determine what bidders constitute qualifying bidders for the purposes of the sales process.

The protocol which is in place for the disposal of the IBRC assets is guided in a specified manner as the Special Liquidator will only be holding the assets for a limited period of time. Any assets that are not sold to third parties for a value higher than the independent valuations will be sold to NAMA at that price. Assets that are transferred to NAMA will then be subject to the protocol according to the NAMA Act 2009.

It is the objective of NAMA in any loan sale to achieve its commercial mandate of obtaining the best financial return on behalf of the State. In accordance with the NAMA Act procedures have been put in place by the Agency to achieve these objectives.

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SDNAMAsubpoenaed

So far, the bankruptcy in Sean Dunne’s bankruptcy case has sought to subpoena three companies and individuals – Credit Suisse, People’s United Bank and an employee of the property company Bruce Shaw called Andy Smyth. Today, the trustee, Richard Coan has made a fourth application for a subpoena and this latest application is seeking to have NAMA questioned on 28th May 2013 about matters relating to Sean Dunne’s bankruptcy.

You may have gotten the impression that NAMA was Sean Dunne’s sole creditor, but in fact Ulster Bank rivals NAMA for title of biggest creditor and the bankruptcy trustee has a duty to all of the creditors.  The trustee is seeking to question NAMA under a provision of the US bankruptcy code known as a Rule 2004 Examination which allows the trustee to question NAMA under oath and seek documentation.

The justification for subpoenaing NAMA is given by the bankruptcy trustee in the following terms

“the National Asset management Agency has information relevant to the assets of the Debtor and/or transfers made by the debtor. The National Asset Management Agency may have other information relevant to the administration of the bankruptcy estate of Sean Dunne.”

Sean Dunne’s creditors meeting has been postponed to 29th May 2013, so it would seem that NAMA can kill two birds with the one (airline ticket) stone by submitting themselves to the bankruptcy trustee on 28th May.

The full application for an order, which is likely to be approved by the judge, is here.

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The “independent valuation” of IBRC’s loans by PwC and UBS was originally supposed to be completed by May, but that might slip to June – remember NAMA still hasn’t got EC approval for 40% of its acquisitions from 2010, so this plan to value loans which had a par value of €27bn last June 2012 and a book value of €16bn, looks ambitious. When the “independent valuations” are complete, that is when the IBRC Special Liquidator will offer the loans to the market. Some borrowers are trying to refinance their loans now before the loans are valued and offered to the market, but they need repay 100% and meet any other contractual payments required under the loan agreements.

DBImageTwitter

One IBRC borrower who doesn’t look like he can refinance his loans 100% is star of the original production of the Dragons Den format on the BBC, Duncan Bannatyne (pictured above). If you’re not familiar with Duncan, he’s like our own Ben Dunne minus the coke and the prossies, having successfully built up a chain of fitness centres, though he has a varied background which includes mobile ice cream sales, nursing homes, kindergartens and writing. He is most recognized in the UK as one of the original investors and business angels on the BBC’s Dragons Den.

The Daily Mail today claims that Duncan has loans with IBRC and suggests that he might owe them GBP 122m (€144m). On Twitter this morning, Duncan is disputing claims made in the Daily Mail article

DBDMGuntrue

but states that he is trying to refinance part of a loan with IBRC, repaying 100% including all contractually owed amounts on that part. He doesn’t indicate what the “part” is but he does say that he hasn’t personal guarantees

DBNoPGs

 

and has only the one loan

DBNoAllOneLoanand is offering to pay all contractually due fees and interest on the part of the loan he is trying to refinance

DBAllFeesPaid

 

The Daily Mail this morning reports that Duncan was originally advanced the loan in 2006 by what was then Anglo, to buy 24 health clubs from the Hilton group.

Duncan is now in the same boat as Paddy McKillen, Denis O’Brien and a slew of other borrowers who have a window to refinance their loans at 100% or else face having to bid for their own loans and possibly – in the case of Paddy McKillen at least – see their loans sold to business rivals. And any unsold loans will eventually end up in NAMA, something that Paddy McKillen at least wanted to avoid at all costs previously.

Paddy McKillen has been making headlines recently with his well-publicised bid to refinance €179m of his loans at par. Paddy is understood to owe IBRC around €900m comprising €300m of personal borrowings and €550m of corporate borrowings. He was attempting to refinance part of these loans at 100% but says that the Special Liquidator insisted he pay 100% of the €179m loan plus €7m early repayment fees, and although Paddy says he was prepared to pay the former, he wasn’t prepared to pay the latter.

It is unclear why Duncan would only offer to repay part of his loan. Presumably it would give him greater leverage over the underlying health clubs, and it might deter bidders when the remainder of the loan is offered to the market. On the latter point, Duncan claims that no-one has been appointed to value his loan.

DBNoValuersAppointed

He didn’t respond to a Tweet that both UBS and PwC have been appointed by the Special Liquidator of IBRC, to value loans generally. KPMG won’t want to comment on a specific loan but it is understood that the option offered by KPMG to borrowers for refinancing of a borrower position is to refinance it at par.

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Tilman Brewin Dolphin, formerly known as Tilman Asset Management is understood to have sold a retail block on Kings Road in the upmarket Chelsea area of south west London, turning a €13m profit on the reported purchase price in 2004. According to commercial property portal, CoStar, the 15,000 sq ft 6-unit property – which houses five retailers named as Petit Bateau, Reminiscence, Accessorize, Vodafone and Timberland – has been sold to Cadogan Estates for GBP 29m (€34m). Cadogan Estates is the property company owned by the Earl of Cadogan who originally owned much of the freehold of property in the Chelsea and Kensington areas.  The initial net yield is reported to be a lowly 3.65%.

The property was reportedly bought by the Irish consortium in 2004 for GBP 18.3m (€22m) yielding an overall profit of close to €13m. The initial net yield of 3.65% in last week’s reported sale would equate to a net yield previously of 5.75% to Tilman. So, looks like a very profitable property investment.

Tilman Brewin Dolphin, based in Clonskeagh in Dublin, says of itself it “provides a comprehensive service for the management, protection and growth of client wealth”

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General  
The reserved judgment in the Paddy McKillen
appeal hearing in London is due any day now
IBF mortgage drawdowns for Q1,2013 due
Central Bank arrears/repossessions Q1,2013 due
   
Monday 13th May 2013
Eurogroup meeting Brussels
   
Tuesday 14th May 2013
EcoFin meeting Brussels
   
Wednesday 15th May 2013
Allsop Space auction in Shelbourne Hotel, Dublin
IPD UK commercial property indices April 2013
(CSO) Agricultural Price Indices March 2013
(CSO) Industrial Disputes Quarter 1 2013
Educn & Soc Protection Oireachtas comm: rent allowance
   
Thursday 16th May 2013
(CSO) Goods Exports and Imports March 2013
KBC Ireland Q1,2013 results
ECB Governing Council meeting
Good Friday Agreemt Oireachtas comm: Narrow Water Bridge
   
Friday 17th May 2013
(CSO) Trade Statistics February 2013
   
   
Saturday/Sunday

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EddieHobbs

It should be said upfront that Eddie Hobbs’s Brendan Investments Property Management has issued a statement here in which it states that it is aware of legal action against a Michigan USA company called “Metro Property Group” but stresses that there is no claim or alleged impropriety being made against Brendan Investments. Brendan Investments is jointly owned by Eddie Hobbs, Dermot Flanagan, Hugh O’Neill and Vincent Regan, with each being a director. The company in its statement expresses confidence in the US company now being sued.

This week in a Michigan District Court, a group of investors represented by celebrity lawyer Deborah Schlussel has filed a case alleging serious misconduct by a Michigan property company, Metro Property Group and associated companies and individuals. The 116-page complaint is here and it makes for fascinating reading. In brief, a group of UK, Australian and Yemeni investors are claiming shenanigans on the part of Metro and others and want their investment back. Finance and economics pundit and TV personality Eddie Hobbs (50) is dragged into it because his company Brendan Investments has apparently teamed up – “partnered” according to the lawsuit claim – with Metro for property investment, though again, to stress, there is no allegation of any impropriety on the part of Eddie or his company.

The lawsuit does however refer to Brendan Investments and claims it has “recently partnered” with Metro with Brendan Investments “reportedly” providing what is called “an infusion of €15m”. A request for comment from Brendan Investments was made before 5pm today, but was not responded to at time of writing. There is comment reported in the old media from Hugh O’Neill, a director of Brendan,  who says “there are a number of inaccurate references to Brendan Investments in the filing.” Ms Schlussel, the lawyer representing the plaintiffs, was asked for information relating to the alleged €15m infusion by Eddie’s firm, and again, there has not been any comment at time of writing.

So, what’s the beef? It is alleged that Metro buy extremely run-down houses in Detroit for between USD 500-5,000 and that they sell them to investors for USD 40,000-50,000 promising impressive returns of, for example, 16.9% per annum from rent alone, that the buildings aren’t habitable, that Metro manage the properties and after a few months, a tenant who may be a fake stops paying rent and the investors are left with dud property and no income. It is also alleged the buildings aren’t “up to code” and that investors have been fined by state authorities because of the condition of the properties.  The complaint is written in colourful language and paints the Metro Property Group as a bunch of villains, accusing it of operating a Ponzi scheme “reaching mini-Madoff proportions”. It even suggests that profits from the alleged scam may have ended up with Iranian-backed Lebanese political and military group, Hezbollah, a group regarded as terrorists in the US.

There is no filing in the case, on Metro’s part yet but newspaper reporting carries comment from Metro that it says the action is unfounded and that Metro is confident the case will be thrown out of court. One of the defendants is a lawyer, Tarek Baydoun who has provided comment to the media and says “allegations of any wrongdoing are completely ludicrous” and “I’m firmly denying any wrongdoing whatsoever” The colourful language in the lawsuit probably won’t do much for its credibility over here where we’re used to more sober allegations, but having said that, there are very specific – and presumably easy to prove or disprove – allegations in the lawsuit which paint a worrisome picture, and although there is no allegation of impropriety whatsoever against Eddie’s Brendan Investments, he may find himself fielding questions about the safety of investments with this US company.

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