NAMA has made an application to Dublin’s High Court against the directors of a company behind a €150m Louth business park. The case – reference 2012/1032 S – lists four parties as defendants, Kevin McNulty, Conal Byrne, Ashburton Construction Limited and P A Bello Limited. The plaintiff is National Asset Loan Management Limited, a NAMA group company which is represented by Beauchamps solicitors. The application was lodged on 21st March 2012 and there have not yet been any filings or orders in the case.
Ashburton Construction Limited has its registered offices at Unit 5, Clondalkin Business Park, Crag Crescent, Clondalkin and has a trading address at 132 James Street in Dublin8. Its two directors are listed as Kevin McNulty and Conal Byrne. Conal Byrne is also the company secretary.
PA Bello Limited, whose registered address is also at Unit 5 of the Clondalkin Business Park, is behind the “de Vesci Hill” residential development in Abbeyleix, Co Laois, the €150m Boyne Bridge Business Park in Drogheda, Co Louth, a 42-house development in Collon, County Louth
In the past NAMA has taken action against individuals to obtain judgments and has also stated that it intends taking legal action to reverse spousal transfers. It is not apparent from the information presently available here, as to the root of the present applications.
UPDATE: 23rd April, 2012. This case was mentioned before Mr Justice Peter Kelly today at the Commercial Court but has been adjourned for three weeks because of incomplete service of documents by NAMA and because a defendant requested more time to examine papers which he claimed were served by NAMA only last Friday 20th April, 2012. There is a detailed report in the Irish Times this evening which builds anticipation for the full hearing itself. NAMA is alleging “grave irregularities” in respect of dealings in property secured on Anglo loans which the Agency has now acquired. Anglo seems to have made boo-boos by releasing several properties unintentionally from charges, and the defendants seem to have transferred property to spouses out of NAMA’s apparent reach. At its heart NAMA is seeking judgments of €90m against the defendants, but there seems to be a litany of irregularity in the case which will make the full hearing in three weeks all the more interesting.
UPDATE: 12th February 2013. The above case came before the redoubtable Judge Kelly in Dublin’s High Court yesterday, and it has all the makings of a real humdinger when the substantive hearing takes place in June 2013. Because Judge Kelly has indicated that he will consider a defence of negligent lending if it can be shown if Anglo, whose loan NAMA has now taken over, was negligent in advancing loans in 2009 if it was insolvent. Judge Kelly ordered an affidavit from an Anglo official – if there are any left! – to confirm “yes or no” if Anglo was insolvent in 2009. Remember, it was March 2010 and later when Anglo received the €25bn in promissory notes. More detail is provided on the case by Ann O’Loughlin in the Irish Examiner today. NAMA is pursuing judgment against three of the four respondents – Kevin McNulty, Ashburton Construction Limited and PA Bello Limited over €88m of loan facilities provided in 2009, personal guarantees from Kevin which date back to 1998 and 2003 and from Conal Byrne over a personal guarantee of €4.1m allegedly provided in 1999 for liabilities of Asburton Limited. The case is said to have arisen when NAMA became concerned over grave irregularities in loan documentation and transfers from Kevin to his wife, Jessica McNulty.
NAMA Wine Lake 
I’m still clinging to the idea that some company directors should be hauled up for fraudulent or reckless trading.
With that in mind, here’s my angle de jour: If a company director (with personal guarantees) weakens his company’s position by transferring assets to a spouse, then it’s reckless. Any takers?
@Ahura M, That’s not the company trading recklessly. That’s a director shifting his own assets to possibly defraud his personal potential creditors. Until his guarantee is triggered it is only a contingent personal liability.
@Ahura M
In principle I agree with you. However one of the difficulties with a lot of company law in this area, is that the company must be in the process of being would up.
Another section that could be be considered would be S139 Companies Act 1990. Again the company must be in the winding up process.
That section allows the court (High Court) to order return of ‘assets’ transferred. There is no doubt in my mind that a personal guarantee is an ‘asset’ of the company and that its deliberate diminution or transfer would be covered by the above Section.
PS I have a general knowledge of company law, no more.
But enough to know that large companies and banks particularly have certainly influenced legislation down the years and this influence had the protection of directors in mind rather than the accountability or control of directors.
The ‘light touch’ applied not only to banks but to all directors and many other areas.
Company Law is a sick joke.
@Ahura/ @WSTT
One has to assume that NAMA specifically informed all debtors that had written personal guarantees for companies, that these guarantees would be called on and advised these guarantors that their asset should not be transferred or disposed of during the ‘resolution’ process.
@JR, Never assume when it comes to NAMA, Joseph. No such specific information issued from the Agency in relation to guarantees.
Speaking of company directors, apologies to NWL, slightly unrelated!
After,the exhaustive Irish love fest in the US,paid for by the Irish Taxpayer linked some photo’s.VB had some fun last night with a FG member,regarding the inappropriate nature of some these ‘huddles’ and photo op’s.
Kenny had lunch with Hugh Cooney,recently in the news regarding siteserv,appears the proposed deal will leave the taxpayer short about a 100 million.
http://www.enterprise-ireland.com/en/News/PressReleases/2012-Press-Releases/Enterprise-Ireland-Client-Nualight-Announces-$100-million-Lighting-Alliance-During-Taoiseach%E2%80%99s-St-Patrick%E2%80%99s-Day-Washington-Visit.html
Later,same day according to Bloomberg,Kenny had a ‘huddle’ with the infamous buyer…
http://www.bloomberg.com/news/2012-03-20/scene-in-d-c-mancy-pelosi-enda-kenny-patrick-leahy.html
http://markets.ft.com/Research/Markets/Tearsheets/Directors-and-dealings?s=SSV:LSE
Meanwhile Anglo/ IBRC have come for Barney Eastwood.
http://www.bbc.co.uk/news/uk-northern-ireland-17493248
@ Joseph Ryan,
I’d replied on Friday, but the internet seems to have mislaid it.
I think there needs to be some test cases. There are laws that place certain responsibilities on company directors. And, although I’m no expert, it seems crazy to have so many busted companies and no one done for reckless trading.
I can’t vouch for random crap I find via google, but this pdf reads well. It covers director’s responsibilities re reckless/fraudulent trading. I’ve copied in some below. The bit about an onus to creditors is intertesing (and “person can be held personally liable (without limitation)”).
http://www.accountingnet.ie/artman2/uploads/ref006directors_duties.pdf
“LIABILITIES
Reckless Trading
A person can be held personally liable (without limitation) for
the debts of a company if, while a director of the company, that
person was knowingly a party to the carrying on of the business
in a reckless manner or with intent to defraud its creditors.
A liquidator, receiver, examiner, creditor or contributory may
make an application to Court to have a director held personally
liable for debts.
A director may be deemed to be knowingly a party to reckless
trading where:
(a) having regard to the general knowledge, skill and
experience that might reasonably be expected of a person
in that position, he ought to have known that his actions or
those of the company would cause loss to the creditors; or
(a) if the director was party to the company contracting a
debt and did not honestly believe on reasonable grounds
that the company would be able to repay the debt.
Fraudulent Trading
Fraudulent trading arises when a person is knowingly a party to
the carrying on of any business of the company with intent to
defraud its creditors or for any other fraudulent purpose. A
Court is empowered, on application by a receiver, examiner,
liquidator, creditor or contributory of the company, to make a
director personally liable for the company’s liabilities. A
director may also be guilty of a crime of fraudulent trading and
liable to either imprisonment for up to seven years and/or fines
of up to euro€63,480.”