On 6th August, 2010, NAMA (in its guise as National Asset Loan Management Limited) launched its first legal action against developers Paddy Shovlin and Patrick and Anthony Fitzpatrick in Dublin’s High Court. RTE is reporting that the case was disposed of today. According to the Irish Times the case involved three loans
(1) €280m advanced by Bank of Ireland to Landmark Enterprises Limited to finance the Beacon South Quarter development
(2) a loan of unspecified value advanced by BoI to an unidentified company for the redevelopment of the bank’s former headquarters on Baggott Street, Dublin 2
(3) loans of unspecified value advanced by BoI to Deileon Limited “for refinancing of directors loans and to finance a loan to Landmark Enterprises”
With no defence entered, the redoubtable Mr Justice Peter Kelly awarded a judgement order in favour of NAMA. There seems to be some confusion over the amount that was being claimed. RTE say that the loan was for €280m and that the judge awarded €38.5m against Paddy Shovlin and €22m each against the Fitxpatrick brothers, that is a total of €82.5m. However there is a comment in the RTE report that the judge thought it odd “that in the case of a loan of €280m granted to the men, Bank of Ireland had reduced the amount of money it could reclaim to less than 5% of the total owed”. The Irish Times is not much more illuminating. They too refer to the €280m having maximum recourse of “less than 5%” (that is, less than €14m) but they say that Paddy Shovlin alone is ordered to pay €25m on that loan. No doubt the confusion will be cleared up in later reporting.
UPDATE: 12th October, 2010. Well, either I have got the wrong end of the stick or there is something seriously rotten in Irish media. I have studied reporting on the case by the Independent (here and here), the Irish Times, RTE and Irish Examiner. All bar the Examiner make reference to the 5% recourse. 5% of €280m is €14m yet all media is reporting that the judgements were substantially in excess of this with either €37.5m (€25m for Paddy and €12.5m total for the Fitzpatricks) or €50m (€25m for Paddy and €12.5m each for the two Fitzpatricks) payable on a €280m loan. To state the obvious, €37.5m is 13.3% of €280m and €50m is 17.9%. Not one media outlet addresses the apparent discrepancy in what is being said. Any explanation or further news on the case will be added here.
UPDATE: October 15th, 2010. Colm Keena in the Irish Times seems to shed some light on the guarantee calculation – he says that the guarantee for the €277.6m (not €280m though of course the sum owing might have risen with interest and penalties) were €18.2m for Paddy Shovlin and half that €9.1m each for the two Fitzpatricks – equating to 13.5%. Which begs the question – what was Judge Kelly referring to with his 5% comment?
UPDATE: 2nd March 2012. In Dublin’s High Court, a non-NAMA bank, Bank of Scotland PLC has obtained judgments against Paddy Shovlin, Tony Fitzpatrick (Anthony Fitzpatrick) and Patrick Fitzpatrick and others in respect of its lending for the disastrous Bank of Ireland offices on Baggot Street in Dublin. Paddy Shovlin is personally liable for €7,929,447 whilst the Fitzpatrick brothers are liable for a total of €7,929,446. Other investors in the purchase included Ronan O’Caoimh CEO of Trinity Biotech who was ordered to pay €1,523,268 and Peter Lavelle for €517,412. A stay was placed on a judgment against Patrick Mooney for €1,606,794 which is presumably pending an contest over an arguable defence.
Right, so…… an impotent exercise! Next?
The amount claimed is a percentage of the 5 per cent, which substitutes for the whole of the loan. 13.5 per cent of 5 per cent. Get the drift!