“The receiver was not hidebound by any views of Nama concerning purchase offers made by Mansfield interests or by persons introduced to the receiver by those interests, the judge [Judge Kelly] added. There was no evidence the receiver would do the agency’s bidding.” – Mary Carolan reporting the Jim Mansfield case in the Irish Times
Breaking news this afternoon that a Dublin court has granted a €74m liability order in favour of NAMA against developer Jim Mansfield; nothing unexpected about that at all, and indeed next month Bank of Scotland (Ireland) is likely to secure an order for an additional €204m against the 72-year old developer, perhaps most associated with the Citywest development in west Dublin and Weston Airport (formerly Weston Aerodrome). Together the liability orders are understood to be the largest ever in the State which is interesting enough. But what was really interesting about the case today was what the judge reportedly had to say about NAMA’s receivers.
The judge in theMansfieldcase was Judge Peter Kelly, perhaps the most prominent commercial judge in the country. Jim Mansfield had opposed the application by NAMA for a liability order on a number of grounds, one of which was reported by the Irish Times to be the rejection by the NAMA-appointed receiver of “an offer of about €11.9million for Palmerston House and estate and concerning any sale of Weston Aerodrome and West Park apartments” The Irish Times reports that Jim was claiming that NAMA would not accept offers on foreclosed property from parties connected with the Mansfield group. There seems to have been a claim that this rejection was in violation of a NAMA code of practice.
The Irish Times reports the judge’s response to this defence which is reproduced at the top of this blogpost, and although there’s no claim that the judge is being quoted verbatim, “hidebound” is the sort of term that Judge Kelly would use. But if Judge Kelly is correct then the NAMA receiver might not in this case, or indeed any other case, need “do the agency’s bidding”. The implication is that a party associated with a developer may indeed be able to purchase assets from a NAMA receiver even if the developer is in default. Section 172 of the NAMA Act was supposed to stop this but on a strict reading of that section and also Section 70 which defines an “associated debtor”, it could well be argued that certain associates of Jim Mansfield are allowed in law to purchase foreclosed properties.
Sadly this issue seems not to have had a full airing in this case, as the judge held that Jim hadn’t sought to remove the receiver, so the receiver’s actions appeared to be moot. So we appear not to have NAMA’s side of the story, but on the face of it, the judge’s comments might be significant in future cases.
NAMA had previously appointed Kieran Wallace of KPMG as receiver to assets in several companies controlled by Jim Mansfield. The receivership is described in detail here.
UPDATE (1): 21st December, 2011. It is being reported that Jim Mansfield has appealed the NAMA judgment to the Supreme Court and that NAMA has apparently agreed not to seek Jim’s bankruptcy pending the outcome of that appeal, Meantime, Bank of Scotland (Ireland) has this morning secured a €214m judgment against Jim in respect of personal guarantees given to three companies – HSS, Jeffel and Park Associates Limited. Judge Kelly who was dealing with the case rejected Jim’s claim that he incurred loss following what Jim claimed was a commitment by BoSI to give him development advances – the Judge said there was no evidence of any contractual commitment to that effect.
UPDATE (2): 21st December, 2011. Judge Kelly’s judgment is now available online, in which he considers – and then dismisses – Jim Mansfield’s arguments advanced to support his wish to have a full hearing of the claim. Judge Kelly granted summary judgment in favour of Bank of Scotland (Ireland).
A rather Shakespearean ending in fairness the Falklands machinery deal was one of best ever done by an Irishman in very tough times.
A brilliantly conceived and executed deal.
Where does these leave these guys they have been out and about trying to raise money for this.
‘A group of managers who were previously involved with Liam Carroll’s Zoe group are one of three parties vying to buy the iconic Anglo building in the Dublin Docklands.’
http://www.independent.ie/business/irish/managers-linked-to-zoe-group-among-three-parties-bidding-for-anglo-hq-2914652.html
‘THE MANAGEMENT team at the property groups formerly owned by developer Liam Carroll have set up a company to manage properties and are assessing interest among investors in the iconic building once earmarked as Anglo Irish Bank’s new head office.
David Torpey, the former managing director of the Zoe group, and John Pope, the group’s finance director, set up Property Asset Management Enhancement Services (Pames) last May.’
http://www.irishtimes.com/newspaper/finance/2011/1003/1224305144826.html
i have always believed that the part of the NAMA Act precluding associates of debtors from purchasing their (the debtor’s) assets from NAMA at the highest bid price because they were in NAMA, was unconstitutional and discriminatory.
A political sop in the Act to appease the masses, but one that is not legally sustainable.
Am I the only person unsettled by this? The man is terminally ill. Yet they pursue judgement. Distasteful and unnecessary. There is no deceny here. did the judge pass comment on his condition? Fair play boys and girls ye must feel virtuous today!
Off topic but any truth to the story/rumour that a valuer working within NAMA is the same guy who was responsible for the Valuation of the Glass Bottle site at the Time it was bought by Bernard Mc Namara and Co??
@patrick, there is a detailed entry on the Irish Glass Bottle site here last year, the following is an extract
“Jones Lang LaSalle (JLL) whose former chairman, John Mulcahy, is now NAMA Head of Portfolio Management , was one of the property advisers (along with Hamilton Osborne King – bought by Savills in June 2006) to the two selling parties of the IGB site – the freeholder State-owned DPC and the leaseholder South Wharf PLC. JLL, however, had been involved with the project on behalf of South Wharf PLC from 2000. A firm acting on behalf of Mr Mulcahy has recently issued a statement which was reported on the finfacts.ie site “Gordon MRM say Mulcahy did not value the Glass Bottle Site. The firm which he chaired at the time [Jones Lang LaSalle] – – together with Savills did advise the co-owners of the Glass Bottle Site, the State owned Dublin Port company and Ardagh plc, on the sale of that site. But that mandate did not require a valuation to be made on the site. Valuations are typically the responsibility of purchasers not sellers” . JLL’s own website refers to South Wharf PLC only as a client, the DPC is not referred to as a client. JLL say they helped broker a deal between South Wharf PLC and the DPC in 2006. This deal was reported to the London Stock Exchange and included provisions that the site would be placed on the market at a minimum of €250m (to what extent was this sum informed by JLL?) and that the proceeds of any sale would be split 33.6/65.4 DPC/South Wharf PLC.”
https://namawinelake.wordpress.com/2010/07/05/the-irish-glass-bottle-factory-site-how-did-a-lease-reportedly-worth-e20m-in-2002-end-up-being-worth-e274m-four-years-later-and-why-did-the-freeholder-of-the-site-the-state-only-receive-e138m/
Would NAMA be allowed provide staple finance to such folk? This is where things could get a little more dodgy.
@nwl could not resist………….
it would appear his role more resembles that of a eminence grise travelling around to obscure conventions at Irish Taxpayers expense and providing lighthearted and jocular commentary on pressing social issues in London……………
John M. was reported as recently ‘wowing’ an audience in ehm WALES I was not aware Nama had a lot of exposure there but nonetheless its reported he spoke eloquently on this topic… .”New partnerships for residential investment”
http://www.irishtimes.com/newspaper/property/2011/1020/1224306120179.html