So says today’s Irish Independent citing a NAMA spokesperson. There might be some that would say the agency “would say that, wouldn’t it?”. The newspaper goes on to report that two developers understood to be in the NAMA Top 10, Joe O’Reilly and Michael O’Flynn have “signed-off” on their business plans with NAMA. And that of the NAMA Top 30, “11 have now signed a memorandum of understanding”.
According to the agency itself last week, of the Top 30,
(1) 16 had signed memoranda of understanding
(2) two were close to signing a memorandum of understanding
(3) seven had been subjected to foreclosure proceedings (NAMA didn’t identify the seven but the view on here is that they are Liam Carroll, Bernard McNamara, Derek Quinlan, Paddy Kelly, Ray Grehan, Paddy Shovlin and David Courtney/Jerry O’Reilly (Radora)) NAMA has acted against a lot of other developers but I don’t think that Jim Mansfield or Capel Developments, for examples, are in the Top 30, but because NAMA hasn’t provided confirmation, this is little more than informed speculation
(4) five hadn’t signed memoranda of understanding and might face enforcement proceedings
Newspaper reporting subsequently speculated that two of the five developers might face enforcement action this week, that is, by Friday 13th May, 2011. The NAMA spokesman told the Independent today that although a developer might sign a memorandum of understanding “it didn’t mean the agency wouldn’t move against them and appoint a receiver if they failed to honour the terms of those agreements”. The view on here is that there more than a little of the “hanging a corpse at the crossroads to deter criminals” in NAMA’s approach.
Despite all of the above, it is unclear whether NAMA has in fact finalized any agreement with any developer. Remember that there are three documents which comprise an agreement, according to the NAMA CEO, Brendan McDonagh
(1) Memorandum of Understanding
(2) Heads of Terms
(3) Final Agreement
And each of these three documents needs to be signed by
(2) the developer
(3) potentially, the developer’s wife
Yesterday was the first year anniversary of the completion of the transfer of Tranche 1 comprising the Top 10 developers who owe an average of €1.6bn; the average owed by the Top 30 is €0.9bn so these are very big enterprises for sure and the business plan is vastly more complex than when you’re looking for a €10k loan from the bank for some office equipment. That said, if it was known in 2009 when NAMA was being conceived that it would be the middle of 2011 when the first plans were agreed, there would have been incredulity or outrage – it is high time for NAMA to have concluded agreements.
UPDATE: 11th May, 2011. The Irish Times today writes that it “has learned” that Sean Mulryan of Ballymore fame has “reached agreement with NAMA on a business plan in recent days”. That would bring to three, the number of developers that have been identified in newspaper reporting as having entered into agreements. There are two curious aspects to the Irish Times report – firstly, the newspaper doesn’t confirm if Sean Mulryan has signed all three documents that comprise agreement or whether NAMA has also signed those documents and secondly, the newspaper repeats the Irish Independent claim yesterday that 12 developers had signed memoranda of understanding whereas NAMA last week said that 16 had. Maybe the Irish Times is just copying the Independent without checking the detail but it is curious because if the Irish Times and Independent were both correct, then that would indicate NAMA wasn’t being completely truthful last week.
UPDATE: 15th May, 2011. The Galway News citing the Sunday Times claims that developer John Lally and his companies Lalco and Sova Properties have signed a memorandum of understanding with NAMA. It’s not clear if John is a Top 30 developer and there doesn’t appear to be any comment from NAMA.