Archive for April 10th, 2012

Last week NAMA made an application in Dublin’s High Court to stop a creditor of one of the Agency’s developers from effecting the sale of property belonging to that developer to satisfy what looks like a minor debt. The case reference is 2012/3539 P and NAMA was taking action against a company called “Art of Fitness Limited”, a Dublin-based supplier of fitness equipment to commercial venues. The developer in question isn’t clear but Newstalk claims the case relates to “Ballyvaughan Properties” – there doesn’t appear to be any company registered at the CRO by that name but maybe Newstalk just means that the properties subject to this case are in Ballyvaughan, but in any event, the developer appears to be peripheral to the case.

Art of Fitness Limited appears to have previously obtained a mortgage judgment – though there is no record of any application at the High Court – for the princely sum of €19,500 and was claiming additional legal fees of €122,000! And to satisfy this demand, 22 holiday homes in Ballyvaughan in County Clare, were set to be auctioned tomorrow. NAMA intervened with its application last week, and this morning the judge at the High Court, Mr Justice George Bermingham stopped the auction and referred the €122,000 legal fees claimed by Art of Fitness to the taxing office to be assessed for reasonableness, as NAMA claimed the legal bill was excessive. NAMA also claimed the €19,500 sought had actually been paid, and it would seem from the judgment that the judge accepted NAMA’s claim.

The case seems a little bizarre, but it seems that NAMA had not registered its charge over the property, and were it not for what looks like an emergency application, the property might have been sold.

UPDATE: 11th April, 2012. The developer at the centre of this case is reported by the Irish Times today to be Megcourt Developments Limited, which is a John Shee and Joe Hanrahan company, and is the first time on here that these two developers have been associated with NAMA. The solicitors costs that are at issue are those of JP Foley and Company who seemingly represented Art of Fitness Limited in the previous action at the Clare Circuit Court where the mortgage judgment was first obtained. The Irish Times reports ” Paul Foley said NAMA’s application was “disingenuous and not well grounded in fact or law” The paper also reports that the €122,000 represents legal costs run up before and after the Circuit Court judgment.

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The jury is still out on here as to the wisdom of Minister for Finance, Michael Noonan setting up a NAMA advisory board which is chaired by career-banker, Michael Geoghegan and also includes Denis Rooney and NAMA’s own chairman, Frank Daly. The terms of reference for the board are pretty light, but that may change in future, and the board was seen on here as a political encroachment on NAMA’s freedom to pursue its objectives set down in the NAMA Act. The Department of Finance already has a staff of 700 and you would have thought it might have been able to muster the skills to properly advise the Minister. Seemingly not. But whilst NAMA continues to attract intense scrutiny of its operations – oftentimes repelled, it should be said by the opaque agency which oftentimes, and with justification, uses the NAMA Act which mandates confidentiality, as a shield – IBRC which is very similar to NAMA, see below, continues to operate largely beneath the radar.


The current drama at Siteserv has shone a light into the usually covert activity of IBRC and most of the country seems bewildered by the apparent decision of IBRC to write off €110m from a €150m loan whilst allowing Siteserv’s shareholders to walk away with €5m. We were also interested to find out that IBRC has been allowing €400k+ salaries at Siteserv, despite the fact that the offer prices for the company – €45-60m – suggest it is deeply insolvent. But how many Siteserv’s are there out there where IBRC is seemingly playing fast and loose with our money? Step forward TV3! In February, 2012 we learned from the Independent that IBRC had indefinitely “parked” an €80m loan to Doughty Hanson which controls TV3, pending a possible future sale of Ireland’s only commercial TV channel. In addition to the “parking”, no interest charges are being run up and Doughty Hanson itself is said to be in rude financial health. As an aside, it will be gas if, some night, someone self-righteously harangues Vincent Browne about the greed, speculation and stupidity of his employer! But why did IBRC offer a measure of debt forgiveness to TV3 when its parent seemingly has the resources to pay back the loan? And what about our national bete noire, Denis O’Brien? There has been reporting which suggests that he owes IBRC hundreds of millions of euro, and might in fact be IBRC’s biggest single exposure.

Somehow I would trust the NAMA CEO, Brendan McDonagh to pursue the interests of this State more than  IBRC’s CEO Mike Aynsley, and ditto NAMA’s chairman Frank Daly ahead of IBRC’s chairman, Alan Dukes. Arguably Mike Aynsley is no longer fit for purpose – when he was originally appointed in late 2009, it was with the expectation that Anglo would be developed into a standalone bank, but as we now know, it is to be wound down, it doesn’t take on new business, hasn’t a branch network and its minimal deposits are kept because they are associated with legacy lending.

Given the similarities between NAMA and IBRC, you might ask why the Minister doesn’t feel the need to appoint an IBRC advisory board. But at this stage, given we own IBRC 100% and for all intents and purposes we own NAMA 100%, and given that both are dealing with generally distressed loans centred on property, given that both are supposed to wind down by 2020 and given that both are funded by state guaranteed funding – NAMA bonds and IBRC promissory notes – why not merge NAMA and IBRC together, generate savings from economies of scale and know-how and take the best from both organisations? And perhaps develop and apply the same standards of accountability and transparency to a merged entity.

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Back in antebellum America, it was common for negro slaves to avoid marrying a spouse from the same plantation for a very poignant reason – no man or woman wants to see their beloved raped, humiliated, beaten or whipped before their very eyes, it’s more than can be borne, and for that reason slaves often married slaves from neighbouring or distant plantations to avoid the reality of their powerlessness in protecting their beloved. And on Sundays, a day of rest in slave-era America, when husband and wife might meet up, the scars or tears would be acknowledged but ignored. Such was the life of a slave as described by a former slave Frederick Douglas – there’s a free online book of his life here.

In Ireland our mass media seems to be adopting a similar attitude towards the repayment of unguaranteed bonds at State-owned banks – “shure, if we can’t do anything about it, why meidhir people with the unavoidable”. That’s why last May 2011, when €200m was paid at Anglo to unsecured, unguaranteed bondholders, there was scarcely a peep from the media – Laura Noonan at the Independent was the honourable exception. It was different in November last year and January this year when the whole country was aware that billions were being paid over to unsecured unguaranteed senior bondholders at Anglo, or IBRC as it is now known following its merger with Irish Nationwide. But tomorrow, we will pay out €1.5bn and there has nary been a peep. Here are the details:

Who: AIB, which is 99.8% owned by the State and which has so far cost €20.7bn to bailout

How much: €1,500,000,000 (€1,500m or €1.5bn)

When: tomorrow, 11th April 2012

What: “Unsecured”, that is, not secured against specific assets, “unguaranteed”, that is not covered by the September 2008 guarantee or its extensions, senior bonds at AIB which were originally issued on 11th April, 2007. The ISIN number is XS0294958318

Maybe the mass media is consciously trying to spare our feelings, believing there is nothing that can be done. After all, AIB is one of the two pillar banks and despite costing us €20.7bn to date, along with the EBS which is now merged into it, it’s dead money, we’ll never see that again, so why bring up the subject which will only cause pain. Frederick Douglas ran away several times from his “owner”, was caught, was dreadfully punished, eventually escaped to the North where he learned his alphabet by pretending to mock white children, boasting he knew more letters than they did, and when the white children sang out their ABCs, Frederick wrote them down and practised them and eventually the man became a writer of some note. His story is inspiring even if the passage of 200 years has not dulled the graphic savagery meted out to enslaved people.

So whilst the Irish Times, IN&M, Communicorp, Alan Crosbie and RTE spare your feelings, tomorrow at 5.15pm, the communities of Ballyhea and Charleville – who have held weekly bank bailout protests for 59 weeks, details/photos here – will again come together, on the library plaza opposite the Charleville AIB branch to protest at the payment.

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