Is this the bankruptcy that NAMA is challenging in the UK?

In June 2012, Minister for Finance Michael Noonan stated in the Dail in response to a question from the Fianna Fail finance spokesperson Michael McGrath that “NAMA advises that it is currently challenging the release from bankruptcy in Northern Ireland of one debtor, due to non-cooperation with the bankruptcy trustee” NAMA has not confirmed the identity of the Northern Ireland bankruptcy that it is challenging but this might be the one.

Back in June 2011, Northern Ireland developer and businessman Sean McWilliams from Derry and his wife Mary McWilliams were declared bankrupt at the behest of AIB. AIB subsequently challenged their discharge from bankruptcy which would normally have occurred in June 2012 – the UK bankruptcy period is 12 months compared with 3-12 years in (the Republic of) Ireland. AIB was initially unsuccessful but at the start of October, 2012 Judge Deeny in Belfast’s High Court ruled that AIB was entitled to now present new material which might impinge upon the discharge from bankruptcy of Mr and Mrs McWilliams. Judge Deeny comments that “I enquired from counsel in chambers, and was told that the AIB Group were now not at the forefront or heart of the dispute between the parties” and the betting in some quarters is that it is NAMA which is driving the challenge.

It seems that there is concern on the bankruptcy official’s part that there are assets or dealings by the McWilliamses which have not hitherto been declared, but these matters were not set out in any detail in the judgment. One asset or dealing might relate to an apartment in the Centria building in Manhattan which might be familiar to some of our readers as it was at 19E that Ray Grehan owned an apartment which NAMA went to court about and was apparently successful in stopping a sale by the Galway developer who was declared bankrupt in the UK, though NAMA continues to pursue him there over a transaction involving an apartment at One Hyde Park in Knightsbridge, London. In the case of McWilliams, it seems an apartment registered to the couple , an apartment bought by the McWilliamses in 2007 for USD 1.445m and sold to a company called Kravet Inc for USD 1.193m in 2009, may have piqued the interest of the bankruptcy official.

The McWilliamses were described by Judge Deeny as being involved “at a very substantial level, in dealing in property in France (including Cap Ferrat) and the United States and perhaps elsewhere of a valuable kind and they achieved a significant number of sales” According to the BBC which reported on the matter yesterday, the couple “owned a number of property companies registered in Swatragh and Dublin and had their biggest projects in County Donegal”

The BBC reports that the case is set to return to court in Belfast on 5^th November 2012 and that the bankruptcy which would have been discharged in June 2012 continues until the appeal has been heard.

UPDATE: 8th November, 2012. News today that the Official Receiver has abandoned their challenge to the discharge of the McWilliams couple. A statement issued on behalf of the couple says “Given the criticisms against them in the original judgement and clear lack of evidence it is difficult to comprehend why the Official Receiver/Trustee refused to accept the original decision of the Court, and sought to drag us through further proceedings…Those questions are for others to pose, we are just glad to have come through the process fully exonerated and can now look forward to  rebuilding our lives”

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Of the Week…

Word of the Week

 “Special”  – Ireland is “special” according to the joint statement by An Taoiseach Enda Kenny and German Chancellor Angela Merkel last Sunday evening. Alas “special” is a word which has a wide variety of meanings in different contexts. “That child is special” used to be a euphemism for indicating some disability. Britain has a “special relationship” with the US, but then again US presidents say that to every country’s head of state who turns up at the White House. During World War II, “sonder”, one of the German words for “special” had a sinister meaning as testified to by the many “sonderaktion”s in former Nazi-occupied territories. “Special” might mean that Ireland has shouldered an extraordinary amount of bank debt with a side effect of protecting the EuroZone banking system. But then again, Germany might claim the  €1-2tn cost of reunification in the 1990s and 2000s was “special” and the “legacy” being addressed had nothing to do with most of the current generation of German people. And although it might be an uncomfortable truth, other EU countries have shovelled more euros into their bust banks than the Irish, it’s just their economies and banking sectors were larger so as a per cent of their GDPs, the figure was smaller.

 

Mobile Phone Service of the Week

The former Independent News and Media director, Karl Brophy may have settled his case at the High Court during the week, against what is now his former employer, but not before revealing in open court the content of text or SMS messages received from Denis O’Brien’s spokesman James Morrissey, one of which said, according to the Irish Times “Karl – truth comes hard to you . . . ask Samantha McCaughren, Paul Cullen . . . When you stop telling lies about me I will stop telling the truth about you . . . Just remind your father of the day he visited Fleishman [where Morrissey works] to enquire about digging the dirt on Denis O’Brien, you want the day and time? history dear boy! James.” We might recall that earlier this year, the former chairman of INM, James Osborne claims to have received a telephone call from INM’s biggest shareholder Denis O’Brien, where James claims Denis said “they’ve been on to me, there’s an article in tomorrow’s paper and I want it withdrawn”. And of course, former INM CEO Gavin O’Reilly was himself the recipient of text messages and phone calls from Denis O’Brien associate and current INM chairman, Leslie Buckley including ones which, according to Broadsheet.ie reproduction of Gavin O’Reilly’s emails and memos, sought the removal of journalist Sam Smyth from reporting on the Moriarty Tribunal proceedings. Even veteran journalist and broadcaster Vincent O’Brien has been on the receiving end of unpleasant correspondence from Denis O’Brien which included an intimation of legal action against Vincent personally, as opposed to the publication for which he writes, the Irish Times.  This pattern is really too good an opportunity a pass up, so will some enterprising mobile phone entrepreneur introduce a service where you can text 68880 and a [telephone number] and a series of bizarre and slightly threatening text messages will be sent to the [telephone number], all for just €2 a pop? You’ll might find templates for such messages in the reported writings and telephone calls of Leslie Buckley, James Morrissey and Denis O’Brien.

 Spot the Difference of the Week

 

With the CSO confirming during the week that Irish residential property prices have risen for the third month in a row, with the imminent abolishment of mortgage interest relief for first time buyers and with some isolated rays of hope in the economy, there is a tentative feeling of normality amongst estate agents. Competition between agents can’t be far behind, but since the awful crash in 2007 followed by a moribund market for five years, the game has changed and there are new players in town…

 Graph of the Week

 

During the week, Eurostat, the statistics agency for the EU released debt figures for EU for the second quarter of 2012. Ireland is in the Top 4 at 112% just behind Portugal. Next year we should rival Italy and Portugal for the second place. Coincidentally this week, NAMA announced that the 17% stake in the Agency formerly owned by Irish Life and Permanent had been sold to a little-known UK outfit founded just over a year ago, Walbrook Partners LLP. The transaction was driven by ILP, which is now 99.5-100% owned by the State and which needed to divest itself of the stake lest the State’s stake in NAMA exceed 50% which would mean that the bonds which NAMA used to pay for the loans it acquired from the banks would come onto the State’s balance sheet, and would have increased our Eurostat-reported debt:GDP for Q2,2012 from 112% by €27bn approximately or another 18% bringing our debt:GDP to 130%. Since it is the State that is ultimately on the hook for NAMA’s losses, some might say that this accounting would be more accurate, though it should be remembered that NAMA has assets backing up its bonds and NAMA maintains it is still “confident” it will break even. Minister Bruton seemed to let to cat out of the bag a month ago when she conceded that a loss of up to €15bn may be on the cards at NAMA.

 

TV format of the Week

This was a landmark week for television in Ireland with the analogue signal being switched off on Wednesday as the new digital service, dubbed “Saorview”, became the only signal available to TVs. “SaorView” means “FreeView” in English and of course, the UK has had a digital service called FreeView for over a decade. Unless the miserable offering of channels on Saorview, Freeview had nearly 100 channels with a strong line-up of entertainment, films, news, current affairs. Here’s the FreeView schedule for today, there doesn’t appear to be a Saorview schedule yet but since the only channels on it are RTÉ One,  RTÉ Two HD (in high definition),  TV3,  TG4,  3e – a second service offered by TV3 currently only available to cable TV subscribers,  RTÉ News Now – a dedicated news channel,  RTÉjr – a kids channel,  RTÉ One +1, it wouldn’t take long to find out what was on. Feeling short-changed? The licence fee in Ireland is €160 and is GBP 146 (€182) in the UK. A FreeView set-top box in the UK costs €23 at Argos, in Ireland the lowest cost for a SaorView box at Argos seems to be €60.

 

On a separate but related point, RTE this week broadcast a TV programme on the future of TV, but as regards the present day, it is a wonder that Ireland, the land or musicians and poets, has seemingly failed to ever produce a single TV format that was successful on a global stage. Yes, we use X-Factor, Come Dine with Me, Family Fortunes, Come Dance with Me, reality TV and other formats from the US, UK and Holland but what format have we ever created? I stand to be corrected but I can’t think of a single one, except…

 

The vastly overpaid and slightly mediocre TV personality.

 

This week, we learned that Ryan Tubridy has signed a new contract with RTE which will see him, or his company, earn €373,333 per annum. This, in a TV market that is 1/15^th the size of the UK’s. This, at a company which lost €70m in 2011. “€70m?!!!” I hear you say, but that can’t be right and didn’t RTE itself say it lost just €17m.One. Seven. But no, when taking the increased provision for pension payments into account, RTE lost €70m, including a €50m provision for pensions. Ryan Tubridy wouldn’t be my cup of tea – that would be more Sean O’Rourke, there’s no accounting for tastes – and you can’t blame Ryan Tubridy for the salary others chose to pay him. The managers at RTE are more to blame and indeed they know that if Ryan’s salary is cut too much, then their salary will also be in line for a chop.

 

Yes, we most certainly have created at least one TV format in Ireland.

 

 

Quote of the Week

 

Okay, it’s just over a week since junior minister Brian Hayes dropped the clanger that Official Ireland believes our debt to be unsustainable, this despite the minister having previously expatiated until he was nearly cross-eyed that our debt was in fact sustainable. Minister Ruairi Quinn chipped in on Monday this week on RTE Radio to reaffirm the change in the official position. I wonder were people as confused when the Church decided that it was okay to eat meat on Fridays?

 

“It’s not sustainable to have a debt to GDP ratio of 120%. A fifth, 20%, of all taxes that we’re taking in this year are going towards payment of the interest on our national debt, that’s not sustainable. We know that, our national funders know that and we’ve got to ensure the deal we get deals with that” Junior minister at the Department of Public Expenditure and Reform, Brian Hayes on Prime Time 18^th October, 2012

 

“Ireland is not Greece. We do not have a debt to GDP ratio of 160%. It is 100% at present and we expect it to top out at approximately 118% by 2013. It will be enormously challenging to service that debt for the foreseeable future. In the 1980s, one third of all tax received in this economy was used to make interest payments on the national debt. In our worst position — in 2013, when our debt to GDP ratio will be at its height — the proportion of taxes being spent on interest payments will be no more than 120%. We need to ask whether that is manageable. I contend that it is. We did it in the 1980s.” Junior minister at the Department of Public Expenditure and Reform, Brian Hayes in the Seanad in July 2011

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