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Archive for July 6th, 2012

There seems to have been an intensification of foreclosure action by NAMA and banks generally in Ireland in the last few weeks. We learn from today’s edition of Iris Oifigiul that NAMA has had receivers appointed to two new companies.

First up is Cork-based Camion Developments Limited, controlled by Mark O’Driscoll and Anton Hunt. On 14th June, 2012 NAMA had Ken Fennell of kavanaghfennell appointed as statutory receiver over sites at Limerick Road, Castleisland, County Kerry on foot of loans from AIB.

Secondly we have Delgrange Properties Limited controlled by Finbar O’Sullivan and his wife Patricia O’Sullivan and a company registered in Jersey. On 2nd July, 2012 NAMA had Michael Cotter of Ernst and Young in Cork appointed as statutory receiver.  Delgrange was behind the development of the Manor West Centre in Tralee.

In addition, NAMA has had statutory receivers appointed to Geraldine and Paul Collins’ PGC Development Limited to which NAMA had previously had share receivers appointed in March 2012.

Although it is NOT a NAMA receivership, it is noteworthy that Bank of Scotland (Ireland) has had receivers appointed to a shopping centre controlled by Neil and Clayton Love’s Shipton Group in Cork city.  Kieran Wallace and David Swinburne of KPMG have been appointed receivers over the 800,000 sq ft Douglas Court Shopping Centre.

Remember you can see a comprehensive list of Irish foreclosure action by NAMA here and in this regularly updated spreadsheet.

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The seventh auction held today by the joint venture between British auction giants Allsop and local partners, Space, has concluded at the Shelbourne hotel on St Stephen’s Green in Dublin. These are the flash results.

The auction catalogue is available here.  Overall the auction raised €10,971,000 from the sale of 79 Lots. 8 Lots were withdrawn before the auction. 3 Lots didn’t reach their maximum reserve – the “maximum reserve” being the pre-announced price above which the winning bidder is guaranteed to get the Lot, but these Lots may well sell later as the final bids were just €1,000 short of the maximum reserces. Two Lots sold for less than their maximum reserves. A busy, workmanlike day with the sublime Gary Murphy again at the helm throughout. There were a few protests from the floor at Bank of Scotland (Ireland) allegedly ruining business and there was a claim about rights of way in respect of one Lot – overall the auction went smoothly and concluded in less than five hours.

Carol Tallon of Buyers Broker Limited again brought valuable and informative commentary from the floor of the auction, and you should be able to read Carol’s account of the auction here.

There will be further analysis on here tomorrow.  Next Allsop Space auction on 3rd October, 2012 apparently.

UPDATE: 7th July, 2012. Allsop Space have been giving their reaction to yesterday’s auction. They say it was one of the busiest auctions to date, with over 60 remote bidders registered from as far afield as Ethiopiaand Japan. They conducted a survey of buyers and found that 52% had mortgage finance in place, and that of the remainder, there was evidence of syndicates pooling cash for investment purchases. They were particularly pleased to see the 14-house “ghost estate” in Kerry sell for €235,000 after what they described as “heated competition”. 26 Merrion Squarein Dublin, the most expensive property in the auction, a 7-bedroom Georgian terrace currently used as a language school sold for €1,420,000 – some €420,000 above its maximum reserve. The property was bought at auction by a solicitor in trust for a client – it is reputedly a former home of Oscar Wilde. They were pleased to see the Drinagh hotel in Wexford sell for €600,000 or €30,000 for each of the 20 rooms. With all but four properties sold, and raising €11.3m and a 95% success rate for this mega-Lot auction, the joint venture between UK auction giant Allsop and local partner, Space, is predictably very pleased with yesterday’s results. The next auction is confirmed for 3rd October, 2012. Gary Murphy, who from experience I can say is the most sublime auctioneer in the business, and who handled the proceedings throughout yesterday said “Dublin residential performed very well today, as did the large commercial lots, with sale prices returned well in excess of reserves. It was an exciting rostrum experience”. Robert Hoban, the Director of Auctions said “A positive message was sent out today about the property market in Ireland. Once again, it is clear that there is indeed a trading marketplace, and the level of competitive bidding and prices achieved are testament to the appetite for property that still exists in the Irish psyche”

 

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“About this time Mr McDonald [Bank of Scotland (Ireland)] told Mr Walsh that he was coming under considerable pressure to lend more money due to increased lending targets imposed by the bank and the bank was keen to expand the loan book to key customers and Mr Walsh was identified as a key customer or a preferred customer.  Mr McDonald advised that the bank had received particulars of Direct Line House in Leeds and it was proposed that Mr Walsh should acquire this property.” Extract from Northern Ireland High Court judgment Chris Walsh v Bank of Scotland (Ireland).

Will this nation ever forgive developers for having racked up colossal lending, which, when the State decided to guarantee the banks and use NAMA to acquire the lending, fell on our shoulders in circumstances where the loans will never be fully repaid because of the collapse in property prices? Maybe we will, but in a judgment delivered in Belfast’s High Court in April this year which has just now been published, we get an insight into lending practices at banks which seemingly show that there are two sides to the lender-borrower relationship.

We have heard before from developers who claimed that banks were foisting money on them. Remember Simon Kelly and his account of banks during the boom in his book “Breakfast with Anglo”? Thanks to this Bank of Scotland (Ireland) case, we get for the first time that I have seen, in a court judgment, a formal picture of life during the boom at Irish banks.

The case involves Northern Ireland developer, Chris Walsh who has a portfolio of commercial property in Northern Ireland and Britain. He has loans from Bank of Scotland (Ireland) in Belfast and this present court case centres on the terms of this lending, there being a variance between the accounts of the developer and the bank. Chris was seeking an injunction to stop BoS(I) from taking enforcement action against him and his companies, pending the disposal of the court case where his dispute with the bank is to be fully dealt with. Belfast’s High Court granted Chris his requested injunction and the case is set to dealt with next year.

So for now, we hear from Chris’s side that BoS(I) was verbally offering terms which were less harsh than those specified in writing in loan agreements, with implications that BoS(I) would support the borrower if, after the specified loan term, the property could not be sold at a satisfactory price. We also hear allegations that bankers were given lending targets, and in at least one case, brought a project to the borrower.

BoS(I) and their asset management company, Certus, have disputed much of what Chris says, but the judge is satisfied there is an arguable case for when the hearing finally takes place next year.  There appears to be internal documentation within BoS(I) which supports the developer’s claims, as well corroboration by the developer’s solicitor. It is set to be an interesting case, which might have ramifications for other developers who feel aggrieved at the sudden change in banks’ attitudes in 2007/8.

The BBC has a report on the case here.

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