Archive for July 15th, 2010

Rumoured to be one of the NAMA Top 10 developers (rumours being denied by the man himself), Paddy McKillen and 14 of his companies were in the High Court yesterday in the latest step in his attempt to prevent his loans being transferred to NAMA. The case is reported in two stories by Mary Carolan at the Irish Times last night and today. The case is reported to be next dealt with on  Monday next 19th July, 2010 when there will be an application (more at NAMA’s urging than Paddy’s it would seem though he is apparently not opposing it) to move the case to the Commercial Court where it might be fast-tracked. The first report by Mary Carolan also states that NAMA may seek to have the substantive judicial review (which was apparently the subject of the application made by Paddy McKillen on 1st July) “telescoped” into the same hearing – presumably that will be the fast-tracked hearing not the application to move the case to the Commercial Court. NAMA have described the case as being “of very considerable urgency given the subject matter”

Of course this case is critical to NAMA. Should NAMA lose, it may find that other developers use it as leverage for their projects or indeed ultimately as a way to give NAMA the two fingers and have transfers of loans declared unlawful – a nightmare scenario for NAMA and possibly the banks to where the loans would presumably return. It would be interesting to know if this application stalls Paddy’s loans going to NAMA – apparently the loans were valued by NAMA yet Paddy’s spokesperson is saying Paddy is not in NAMA (a bit of a travesty if that were the case as any potential NAMA debtor looking for more time to re-finance would just have to lodge an application to stall for time).

As to the application by Paddy and his 14 companies (the only one of which mentioned by the Irish Times is Dellway Investments), there appear to be a number of strands to his case, though it is not clear whether these are legal arguments or personal feelings towards NAMA and of course the list mightn’t be exhaustive.

1. His loans aren’t NAMA eligible assets.

2. He wasn’t given enough time to re-finance his assets

3. NAMA valuations are lower than his valuations

4. To be associated with NAMA is, apparently, bad for your commercial reputation

5. NAMA offends the Constitution and EU rules with respect to property rights

6. Anglo didn’t want his loans transferred to NAMA and the matter is apparently subject to a review and Paddy is excluded from participating in that review.

Given the speed at which NAMA has been made operational, it is surprising that this is apparently the first legal challenge. NAMA is dealing with borrowers for whom litigation is akin to getting a coffee from the canteen – part and parcel of daily life, and also given the many elisions of powers made by the EU in February, 2010 (which implies that this is an area where NAMA may still be vulnerable). It would be surprising if this was the last legal challenge to NAMA.

Lastly as this case is crucial to NAMA’s operation, it is getting its own tab under “The Developers” tab so that you can keep track of the most uptodate news from the case.


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Property company and arguably NAMA chief valuation adviser, CB Richard Ellis, has issued its latest quarterly report for the Dublin office market and concludes that there were €103m of transactions in the first half of 2010 compared with €92m for the entire year in 2009. For valuers who must be struggling to find comparables for NAMA’s Valuation  Dates (the date it has chosen pursuant to section 73 of the NAMA Act by reference to which it is valuing the current market values of assets underpinning NAMA loans), perhaps this abundance of transactions might also be an advantage in valuing NAMA-bound loans. Of course the increased transaction level did not translate into higher prices, rival property company, Jones Lang Lasalle’s index published yesterday showed that commercial property in general fell by 4.7% in the second quarter.

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