Game of chicken comes to a head as Treasury’s judicial review proceedings kick off in Dublin today

What a difference a year makes! This time last year, Treasury Holdings – the Dublin-based company which recently described itself as the “only full spectrum property asset management and development company inIreland” – was seemingly making progress in its relations which NAMA and word on the street was that it was one of the Top 10 NAMA developers which would be saved. NAMA and Treasury were then making progress in selling what is likely to be NAMA’s most expensive property, the 38-acre Battersea Power Station site on the banks of the Thames in central London. Progress was also seemingly being made in NAMA and Treasury’s discussions aimed at producing a restructured loan agreement.

But then in December 2011, NAMA and other creditors put the Battersea site into administration, a move which showed all was not sweetness and light in the NAMA/Treasury relationship. Then at the start of this year, NAMA made a move on Treasury’s Irish properties when it sought to appoint receivers to a raft of Treasury group-companies. This was resisted by Treasury who then hit back with an application for a judicial review of NAMA’s dealings in its loans. This led to a hearing in February 2012 where NAMA resisted the judicial review. NAMA lost its bid to stop the judicial review. Treasury then held out an olive branch of mediation, to which there was no public NAMA response.

This morning at 11am in Court 14 at the Four Courts (High Court) in Dublin, Ms Justice Finlay Geoghegan is set to start hearing the judicial review proper. Treasury is set to bring a range of arguments that go to the core of NAMA and the controversial legislation which created the Agency. NAMA must defend itself tooth and nail, lest it find aspects of its operation declared unlawful which might have awful financial consequences for NAMA, and because ultimately we guarantee NAMA’s finances, on us.

Both the NAMA CEO Brendan McDonagh and the colourful Treasury co-founder, Johnny Ronan, are set to take the stand during the course of the hearings. Today is likely to be given over to Treasury’s opening argument.

It is hoped that there will be daily coverage here – with updates to this blogpost, unless there is a particularly significant development – from the hearing which is likely to last a couple of weeks.

UPDATE: 3rd July, 2012. RTE probably has as good a summary of Day One as any media outlet. Michael Cush SC, the barrister/senior counsel who did so well for Paddy McKillen, opened for Treasury Holdings today and said there were five matters for the court to decide, though only four are mentioned – (1) If the NAMA decision at the start of December 2011 was a “public law decision” and if so, breached NAMA’s obligations as a public body (2) did Treasury have a right to be heard by NAMA before the decision to foreclose was taken (3) does NAMA have to act “fairly and reasonably” (4) did NAMA consider the third party investors and their interest in Treasury’s loans before making the decision to foreclose. Separately, NAMA has served Treasury companies and Richard Barrett and Johnny Ronan with demands for payment in the “past few days”. The gloves are truly off.

UPDATE: 5^th July, 2012. Day Two. The Irish Times and Irish Independent have almost word-for-word identical reports on yesterday’s performance at the High Court – the Irish Times report by Mary Carolan was filed first online yesterday evening – Tim Healy’s report in the Independent is date-stamped today. Curious. RTE has reporting online also. With respect to the case, Michael Cush SC concluded yesterday Treasury’s opening salvo against NAMA, and a lot of consideration seems to have been given to a papernote made by NAMA which was disclosed to Treasury in these proceedings, a note which warned against “tipping off” Treasury, lest according to Michael, Treasury runs to the courts for protection or to seek examinership.

Paul Sreenan – barrister/Senior Counsel – opened the response for NAMA yesterday. Going to the core of the matter, Paul suggested it was ridiculous if the law required NAMA to participate in what he termed “endless debate” with a massively insolvent company, or to put it slightly sarcastically, that NAMA would have to give notice to Treasury to let it know in advance that it was going to demand repayment of loans from Treasury – loans which Treasury admitted it owed. NAMA is said to have given Treasury – whose €1.7bn of loans were taken over by NAMA in 2010, Treasury has total borrowings to all banks of €2.7bn –  €100m in additional lending for working capital and finishing projects, presumably a significant sum went on the Google Monte Vetro building on Barrow Street. Treasury is said to have attempted on several occasions to go back on an agreement to reverse the so-called TAIL transaction, and the claim is that NAMA reached its decision to foreclose after extensive engagement with Treasury.

The case continues. Michael Cush told the judge, Ms Justice Mary Finlay Geoghegan on Day One that the case may only last a week instead of the scheduled two weeks. The NAMA CEO Brendan McDonagh may make an appearance on the stand tomorrow. Later today he faces the Oireachtas public accounts committee where frankly he will face more confrontational questioning than even Michael Cush can muster.

Separately, we have learned that both KBC and NAMA have both served repayment notices on Treasury, and in the case of NAMA on the Treasury founders, Johnny Ronan and Richard Barrett. According to both the Irish Times and Irish Independent “KBC, in a notice served last Friday, said it would seek an order winding up Treasury unless it was paid €20m within 21 days of that demand. NAMA also issued demands for repayment of €3m each to Mr Ronan and Mr Barrett in their capacity as guarantor of a €13.5m loan to Treasury”

UPDATE: 13th July, 2012. Thanks to a sparse report by the Independent and Examiner, it seems the seven-day hearing has concluded and a judgement is expected later in July 2012. There is NOTHING about the proceedings themselves – did Johnny turn up? Did the NAMA CEO take to the stand? Who knows, who can tell.