It is reported by the BBC that one of NAMA’s largest debtors, Ray Grehan has obtained a bankruptcy adjudication in the UK. NAMA’s pursuit of the Galway developers, Ray and Danny Grehan was one of most bitter episodes involving the Agency in 2011. In April 2011, NAMA sought to appoint receivers to companies controlled by the Grehans, only to “stand down” the receivers days later after it emerged that NAMA apparently hadn’t followed procedure correctly. A demand for repayment of hundreds of millions of euro was presented by NAMA to the Grehans and after the inevitable non-payment, the receivers (and administrators in theUK) were re-instated.
News of the receivership was initially greeted with surprise because the Grehans were understood to have had an outline agreement with NAMA, but difficulties arose, including apparently after NAMA sought to have Harry Slowey appointed to the Grehan companies.
There then followed an acrimonious series of battles, as it was reported the Grehans were to be regarded as personae non grata at former buildings including the Glenroyal hotel. NAMA then sued the Grehans individually in the Irish courts to have judgments registered against them individually and on 9th November 2011, NAMA secured a judgment of €270m against Ray in Dublin’s High Court. There then followed legal tussles in Toronto, New York and possibly in London where the Grehans have €1m+ apartments. Just before Christmas, NAMA secured an order in London preventing the Grehans disposing of assets worldwide. Ray for his part gave interviews to the Sunday Business Post and to RTE for its NAMAland Prime Time special and it was obvious that there was personal bitterness between him and NAMA.
On 30thDecember, 2011 Ray Grehan using an address of Flat 7, 1-6 Bateman’s Row, in Shoreditch, east London and a post code of EC2A 3HH, was declared bankrupt in the High Court in London, according to the BBC with reference to the UK Insolvency Service. His full name is shown as Raymond Francis Grehan and his date of birth is shown as 8th October 1961 and the entry states “Raymond Francis Grehan of and currently trading atApartment 7, 1-6 Bateman’s Row, London EC2 3HH, lately residing at Crinstown, Maynooth, County Kildare, Ireland a Property Developer”
NAMA which is likely to be Ray’s largest creditor has not commented on this dramatic development. In the recent UK bankruptcy case involving Sean Quinn, his main creditor, Anglo (or IBRC as it is now known) is seeking to have the bankruptcy overturned so that, presumably, it can seek Sean Quinn’s bankruptcy in the Republic of Ireland.
In the UK, bankruptcy typically lasts 12 months though if creditors object to the discharge, conditions can be imposed on the bankrupt for up to 15 years. In the Republic of Ireland, bankruptcy now lasts for five years typically (down from 12 years, following an amendment to the legislation last Autumn) but there are proposals afoot to radically change the personal insolvency regime and new legislation is expected by March 2012.
UPDATE (1): 6th January, 2012. There is no word at present about Danny Grehan who also had a personal judgment of nearly €300m registered against him in November 2011 and who is now understood to be resident in Middlesex in the UK. There is no entry on the UK Insolvency Service website but that just shows actual bankrupts, not applications. NAMA has of course allowed another colossal borrower, John Fleming to declare bankruptcy in the UK and indeed, John exitedbankruptcy after 12 months in November 2011, after having debts of nearly €1bn when he declared bankruptcy in November 2010.
UPDATE (2): 6th January, 2012. NAMA is not making any comment at this time in response to the Ray Grehan bankruptcy.
UPDATE (3): 6th January, 2012. RTE is reporting “”Clearly we will review the situation but our focus remains on recovering the maximum debt for the Irish taxpayer,” a spokesman for NAMA, now one of the world’s biggest property groups, told Reuters” Hmmm, has this move come as a surprise to NAMA? It was certainly on the cards, so hardly a surprise generally but was the specific revelation today a surprise?
UPDATE (4): 6th January, 2012. David Murphy on RTE Six One news has just said that Danny Grehan has also filed for bankruptcy but as at 6pm today, he is not showing on the UK Insolvency Service website.
UPDATE: 7th January 2012. Ray has spoken with the Irish Independent, and Emmet Oliver reports the conversation today. “I have cut the cord” and “ultimately it is good for the economy, it allows people to get back into business, to get a second chance, at the moment the property sector in Ireland is totally static” are the only direct quotations but Ray is also reported to have said that he expects hundreds of builders and developers to follow in his footsteps to the UK and to seek bankruptcy there.
NAMA Wine Lake 
Well done ray. No doubt you will be one of many. Good luck in the future.
@NWL..”but there are proposals afoot to radically change the personal insolvency regime and new legislation is expected by March 2012.”
This is long overdue, imprisoning people for non payment of debts is medieval,serves no purpose.
Does the prisoner,reflect,atone for their crimes and vow never to not pay back easy and stupid lenders again,or is it just a complete waste of time,energy and resources.The Govt. is attempting to spin non custodial sentencing for non payment of fines/debts with garnishment of wages/social welfare the solution.No other civilized country in the world jails people for non payment to creditors.
With modern humane BK laws people like the Grehan’s would be much more willing to co-operate with their creditors,who can blame them,they want to get back to work,employing people creating value not getting dicked around by NAMA.
Best of luck to you Ray and Family
Does this present the UK creditors with a right of payment ahead of Ireland.
My understanding is people go to jail who refuse to pay, as distinct from those who are unable to pay.
It is not a crime to be poor. Or is it?
Hey NAMA here’s a brilliant idea why not piss off annoy irritate ALL the borrowers, this is a failure for NAMA and NTMA the policy is flawed.
””Clearly we will review the situation but our focus remains on recovering the maximum debt for the Irish taxpayer,”
@VincentH, No, we are all in the EU. But unless NAMA has a lien on the assets, it ranks alongside other unsecured creditors. In other words, it can no longer be treated as a preferential creditor, which is what it tries to achieve most of the time – illegally, it might be argued.
It has this policy of keeping the borrowers alive to allow the appropriate amount of time to pass so that it achieves a preferential position over other creditors. The borrowers are lulled into believing that they have a reprieve, but the truth is that there is an agenda behind that reprieve that they are not aware of and know nothing about.
There are some surprises in store for compliant borrowers after the effluxion of the relevant period of time.
These facts are confirmed by outside legal representatives who sit with the various portfolio managers on some of these “judgment” committees. “Let them live until we are properly positioned” is the NAMA mantra behind the borrowers’ backs.
Not exactly moral business behavior, nor an ethos that will foster trust and cooperation.
There will be many more that will forum shop for bankruptcy in the UK rather than deal with this mutation of NAMA – who, if it continues down this path, will end up toying with itself alone in the corner.
@WSTT; I must revisit a point you made in another post re: Nama employees.
You nailed it when you said, they’ve made enemies. Do they realize this? There positions are secure only for the lifetime of the Agency. After that the younger ones will return to the job market. And to put it mildly I wouldn’t envy their prospects.
The borrowers, their families and employees remain immensely well-connected and liked by a certain stratum of society. The way in which NAMA has dealt with them has garnered much sympathy for them. I for one wouldn’t be holding out much hope for those Nama employees who push too hard. They’ll be shunned like collaborators in post-liberation France. The circle will turn. Do unto others etc. This country is much too small and as we know memories are long.
Best of luck to Ray & Danny. Well done lads.
What an extraordinary comment bearing in mind that Nama is bailing out these well-connected borrowers for €42,000,000,000 i.e almost €10,000 per man, woman and child in the country.
@NWL, You have to get an edit button! It’s only afterwards that I notice the grammatical errors :-)
As I have pointed out before the Swedish version of NAMA, Securum, recovered only 45% of the amount it paid for the “zombie” assets it acquired and over 70% of its borrowers were bankrupted personally or were liquidated.
We are on the same path in Ireland. There is no reason why it should be any different. In fact the figures for bankruptcies could actually be higher because of the attractiveness of the UK bankruptcy regime.
………. a year in the Cotswolds, anyone?
@NWL
Do you know how much a bankrupt person is allowed to retain for living purposes in the UK or in Ireland?
Is it the equivalent of Jobseeker’s assistance?
Of course if their wives retain money “in their own right”, then presuming a happy marital state, being a bankrupt could entail a very pleasant lifestyle.
Or would a bankrupcy court take into account the household income as the Dept of Social Welfare would for jobseeker’s assistance, with the IMF in the background calling for punitive actions against the “un-cooperative unemployed” .
@BF who asked for you help bailing me out,Ray did not.
Burn the bondholders and get back to me,until them its a banana republic.
@JG
No one – we have had no choice thanks to the blanket guarantee and ECB.
IMHO, the original Fine Gael “good” and “bad” bank proposal had great merit. The “bad” banks should have been gifted to the bondholders at the outset and they could have dealt with the borrowers which would have been very interesting to watch.
@JG
In case you think that I’m against burning bondholders, here is a message sent earlier today to all TDs:
http://www.planware.org/briansblog/2012/01/another-message-to-tds-about-anglo-bonds.html
We have been an banana republic since about 2000 when the greedies took over.
@BF everyone made mistakes,voters,regulators,bankers,builders,journalists.
It is what it is,but demonizing RE developers who create employment,have skills,create jobs are IRISH,to pay BONDHOLDERS.
Here is the REALITY,remora fish swim behind sharks,when bonds get downgraded remora fish,the fat ugly ungrateful people,social misfits,shunned by their peers,unwashed,buy them,they are back of the office people.
Now, should Ray really give a flying fu.. if he made good on his debts,the Irish Govt will wire that money to obnoxious people who are calling in the Anglo bond.Run Ray run,don’t look back, even if you could pay back your debts the dumb ass paddies will simply pay some hedge fund out of London that owns Anglo bonds.
Sorry, but rubbish. Yes there were errors made. And yes many people made errors. However there is no way on gods green little earth that the manipulations made by a bunch of north Dublin FF bagmen can be included with someone trying to protect their future by buying a rental property. No way José.
Ray filed BK,if you reviewed Flemings filing,Ray will get a fresh start.What is so wrong with that.
What we now need is to support the actions on New Beginnings and unite in bringing banks to the table to work together to find solutions. If a bank is notified in writing that a collective group of 1000 customers are planning bankruptcy in the UK unless they get their head out of the sand, they will have to take notice.
The country will be left with civil servants and those on on long term social welfare without the SME entrepreneurs who create economic growth and pay for everything.
@BF, Hi Brian, :-) You said: “….we have had no choice thanks to the blanket guarantee and ECB.”
When did you have your epiphany and become Paul on the road to Damascus? You’ve been berating me since the blog started for blaming our woes on this very point!
@WSTT
To elaborate, we had little choice* ONCE we got locked into the guarantee. However, we only got to that position because of the greed and/or incompetence of developers, bankers, regulators, government etc. It is the difference between cause (greed etc.) which I focused on and effect (bank crisis and guarantee) which you pursued.
I wouldn’t dream of berating you and if it came across that way I apologise.
* Having said that I think that we MUST create a choice and get out from under the guarantee and ECB, otherwise the country will be sunk by the debt to be carried and servicing costs. The principle of a 50% writedown has been established for Greece and, for starters, it should also be applied to Ireland.
@BF
It’s hardly an extraordinary comment, but one based in the day to day realities of Irish business.
These people are one time poachers turned gamekeepers. They are often the same people who had previously feted the borrowers, worked with them, supplied them with finance or sold them properties. Their draconian measures destroy the lives of the borrowers and their associates and family members. There will always be a reaction.
There is a turning in public opinion on the ground as the measures are now extended beyond the larger borrowers to the smaller. Receivers are facing protests on the ground, from local boycotts of businesses to communities blocking sales.
Far from being the comic villains of Nama’s portrayal, the borrowers are entrepreneurs and employers. They are also drawn from the ranks of all types of professionals, solicitors, doctors etc. They retain the good will of their communities. The actions of Nama’s managers are vindictive and the punishments meted out have a wide effect.
So not so extraordinary. They are not liked. When their tenure is up they will be shunned. We remain a parochial people who remember slights and aggression. That is the reality and the vindictive nature of their actions will return to haunt them. That is the reality in a country with possibly less than one degree of separation between it’s people.
I find it hard to believe I’m defending Nama but the reality is that its job is to collect as much of the debts due as possible. I also have problems with gamekeepers turned poachers but I don’t accept that you should be so threatening and intimidating.They may be not liked but be assured the borrowers they deal with a liked an awful lot less. In saying that I draw clear distinctions between the small cabal of overleveraged gamblers and their banking buddies at the top for whom there is no goodwill and all the Sean Citizens who are losing their modest businesses, jobs and houses thanks to the cabal and for whom there is great sympathy and support..
I hardly think I’m being threatening. If that were the case I’d need look no further than the Nama gamebook!!! They’re amongst the mist threatening individuals I have ever encountered.
I don’t think distinguishing between borrowers is the way either. They’re all equal. Whether they owe 20 or 200 millions. Some of the largest retain good will and support.
@Garfunkel
“I don’t think distinguishing between borrowers is the way either. They’re all equal. Whether they owe 20 or 200 millions.”
I hope that you are not being flippant as by my reckoning the difference is a *mere* €180 million.
@BF Also Brian, the developers are not being bailed out by NAMA or the taxpayers. None of them (to the best of my knowledge) asked for a bail out. Seventy percent of them will end up with nothing as they will go through the liquidiser. Some may escape thanks to the way that they structured their holdings – but most will not. Most accept bankruptcy as the consequence of a property recession – but that does not make them criminals.
The criminality came with the blanket guarantee and the decision to pay the bondholders. Both decisions passed the losses to the taxpayer. Both decisions were political, not commercial. And they were made to support banks that should have been let fall or be taken over by their bondholders.
You mentioned that it would have been interesting to see what would have happened if the bondholders inherited the banks. The answer is that we would have seen a commercial solution, not a political one and we would now have new and functioning banks – not a ten year depression. I agree that the Fine Gael solution was far superior to that imposed by the incompetents in Fianna Fail, but the rear view mirror is too small to be looking through now.
One thing is certain as we look forward, there will be a flood of bankruptcies as the action of choice. Not just by the developers, but by the many “homeowners” (isn’t that an oxymoron!) who are underwater financially. This is something that strikes fear into the hearts (another oxymoron!) of our bankers. It isn’t just the developers loans that the politicians decided to pay when they paid the bondholders. Any time politicians decide to go anywhere near commercial transactions it is a disaster. If you live by the sword – you should die by it – and leave the taxpayers out of it. It should have nothing to do with them.
@WSTT
OK, we agree to disagree about the guarantee etc. Agree that the establishment is (or should be) very scared of the knock-on consequences of a new bankruptcy regime.
Just look at the reactions to the household charges and tax on old age pensions. The charges and tax are legitimate in their own ways but very annoying when viewed in the context of what else is going on – and I’m not just referring to big borrowers being bailed out or jumping ship.
The Government clearly doesn’t get the message that you can annoy some of the people all the time and all the people some of the time but you must not annoy all the people all the time.
@BF, Mea culpa, Brian. I sometimes get a little flowery with the prose. No need for apologies – I’m really rather thick-skinned :-)
Hope you have a healthy and happy 2012… The wealthy bit is OK but it is nothing without the first two. Also success in your endeavours in lobbying to get a debt write down. You should link up with Peter Mathews.
In case you guys forget the basics in your otherwise riveting argument:
Nama is run like North Korea,
The no lobbying law is an insult,
Hospital beds close while bondholders buy yachts,
Ireland is being positioned as some sort of poor EuroKansas,
Ireland is being positioned as some sort of poor EuroKansas and taking it with a submissive smile.
Talk of bankrupt homeowners by the thousand and no revolution in sight, not even close.
Interesting argument about the future and the hunting of non-developer types. On what scale I wonder?
Remind me again what so wrong with a future as a small independent nation with identity…
Hi sf it’s not the size of the dog it’s the …
Ah yes JG, we are dealing with a fluffy green poodle, I forgot
A grinning one,until they get some ‘game’ far fuc.s to Ray,they will pay degenerates that run bucket shops,who specialize on the spread when a bond gets downgraded.
@JG
re “degenerates that run bucket shops,who specialize on the spread when a bond gets downgraded.”
I remember some/several Miinister types saying on RTE and elsewhere when asked about burning bondholders
“We have to consider the profile of those investors” —
like they were all so noble, some ethereal caring and loving pension funds, who couldn’t and shouldn’t be touched.
I like your description better.
That last sentence is practically urban poetry.Ashbery in a suit.
@nwl
with the suggestion that NAMA might become a big gruely collection monster of the decade, and Irish money just filling greedy foreign holes, what is the latest thinking on where the money NAMA might collect will actually go, surely not to a classroom?
What a baffling general question. But if you do not attempt to answer it I might injure myself thinking about it.
@sf ca, the money NAMA collects will go, in the first instance, to redeeming the bonds NAMA used to pay the banks for the loans in 2010/2011. It will also go to funding the NAMA operation (€1.6bn of operating costs in Net Present Value terms over 10 years to 2020). And some will be used to finance developments (about €1bn so far approved) but NAMA is lending this at a margin and the hope is it will be repaid with interest. If NAMA makes a profit after all of that, then it will go back to the government central fund for classrooms etc.
@nwl
“the banks”…… what does that really mean any more?
The IBRC crucifix graphic springs to mind.
I understand your answer, but, really,”the banks” is a worrisome catchall answer, not a place where people safely keep their wages.
As for NAMA and profit, that might never(will never) happen, which is why I fear after they are done with big developers they will flex all they have…debt collection power… on people like my uncles aunts and old friends. And boy is that a job with Irish civil servant mentality written all over it.
Is ring fencing NAMA receipts for some sort of social dividend even on the table?
@ namawinelake : Are there any figures avaiilable at this point showing how much NAMA and IBRC have (a) spent in legal fees and other costs in pursuing colleateral/guarantees; (b) how much in (nominal) total has been obtained in judgments and (c) most significantly, how much has actually been realised in hard cash? If, as I suspect, item (c) accounts for little or nothing, surely the question must be asked: at what point will they stop throwing taxpayer’s good money after bad in a vain effort to realise colleateral/seize personal wealth that has been put well and truly beyond reach?
Many will say that it was always an important element of both the Guarantee and Nama to buy enough time for the big players to put their personal wealth beyond reach. From what is emerging in the reports of the futile recovery process, this seems to have been done with great thoroughness.
Perhaps the expensive and fultile exercise in recovery should be termed “NAMA: The Final Insult!”
@PTIM, no there is no such breakdown from NAMA (nor Anglo as far as I know). NAMA publishes a total for legal fees but it is not possible to tease asunder NAMA’s various legal actions, eg Paddy McKillen’s case is expected to cost NAMA €7m alone. NAMA has got nearly €1bn in personal judgments against the Grehans, Paddy Shovlin, the Fizpatrick brothers and Jim Mansfield. How much has been realised in cash? Again we don’t know. NAMA sold 58 apartments to the Cluid housing association from Paddy Shovlin’s Beacon South Quarter, but that’s likely to have been security on the original loan. I wouldn’t imagine it’s very much.
I have no sympathy for either an insolvent developer or NAMA.
We’re the ones picking up the costs of the mistakes made by both parties.
I must be going deaf….. I didn’t hear anyone ask for sympathy!
@gd, We’re also picking up the costs for the mistakes made by the bankers, the bondholders and the politicians. Those costs were passed on to us by the politicians and their masters in Europe – no one else.
@WSTT : plenty of expressions of sympathy on this site for bankrupt developers by those posting comments.
Many of these NAMA’ed developers were bankrupt long before the NAMA even became a pipedream of FF/Green government.
The fact that NAMA appears to be compounding and prolonging this debacle is a fair point that you have consistently made and which I agree with.
As I said neither the bankrupt developer or NAMA deserve any sympathy or support.
They’re both now a cost on the taxpayer courtesy of Fianna Fail and Green government.
While I agree Partly with what Ray and others Like him are doing a part of me also feels sorry for the Smaller Creditors such as the Sub Contractors who will get little if any of the monies owed to them back in this Process,A lot of other people in the General Population will also see this as these Guys Walking/Running away scot free and Leaving the Rest of us to Carry the can for their Mistakes.
[…] close on the heels of his brother, Ray, it is confirmed on the UK’s Insolvency Service website that Danny Grehan was declared bankrupt on […]
@kd, It was remarked to me a long time ago, “If you’re looking for sympathy, you’ll find it between sh*t and syphilis in the dictionary” I’ve never looked for it since.
http://www.irishtimes.com/newspaper/finance/2012/0508/1224315740608.html
Vet College site value looks worse tha IGB site