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Archive for October, 2012

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 5th 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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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 1/15th 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 18th 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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Sources are this afternoon claiming that Gortanore, the 3-acre site with a modest house in Foxrock, Dublin is under offer by the embassy of Saudi Arabia for a price a little north of the €5m asking price when it came on the market in August 2012. The property was the most expensive residence sold in Ireland in 2006 but its €31m price then reflected its development potential and there were plans to build apartment blocks with some commercial space. The property was owned by David Arnold of D2 Private fame. Neither of the joint agents, Jones Lang LaSalle or Daphne L Kaye had any comment at time of writing.

Separately , the property which was the subject of most expensive residential property transaction ever in Ireland – the Sean Dunne-associated €58m purchase of Walford at 24 Shewsbury Road – which went on the market a year ago with a price tag of €15m appears not to have been sold. In the Dail this week, the Sinn Fein finance spokesperson Pearse Doherty asked the justice minister Alan Shatter if the property had been sold. He was told it hasn’t been sold.

The full parliamentary question and response is here.

Deputy Pearse Doherty: To ask the Minister for Justice and Equality further to Parliamentary Questions No.183 and 184 of 9 October 2012, if there has been a sale of a property known as Walford at 24 Shrewsbury Road, Ballsbridge, Dublin 4 during the period covered by the recent release of data by the Property Services Regulatory Authority in its property price register, and if there has been a sale of said property, if he will provide the sale price, the date of the sale and the quantum of stamp duty paid to the State on the sale.

Minister for Justice, Equality and Defence, Alan Shatter: The information included in the Residential Property Price Register is compiled from data filed with the Revenue Commissioners for Stamp Duty Purposes. I am advised by the Property Services Regulatory Authority, which has responsibility for the Register, that all properties filed with the Revenue Commissioners in the period 1 January 2010 to 19 October 2012 are on the Register and that the property referred to by the Deputy is not included.

The Residential Property Price Register provides information on the address of the property, its sale price and date of sale. The Register does not provide any information on the quantum of stamp duty paid to the State, which is solely a matter for the Revenue Commissioners.

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We learn from today’s Iris Oifigiuil that NAMA has had receivers appointed to assets at twop companies, both of which have been financially embattled for some time.  NAMA has had Liam Dowdall of Smith & Williamson Freaney appointed as receiver to the following assets at P Elliot & Company Limited

(1) 133 and 134 New Seskin Court, Tallaght, Dublin 24, and the rents and profits deriving therefrom
(2) 305 Harbour Point Business Park, Little Island, Cork;
(3) Apartment 90, Block B, Temple Court, Northwood, Santry
(4) No. 17, Knightsbrook Park, Trim, County Meath
and the rents and profits deriving therefrom

P Elliot had receivers and liquidators appointed in June 2011 at the behest of non-NAMA creditors.

NAMA has also had Liam Dowdall of Smith & Williamson Freaney appointed as receiver to an unidentified property – looks like a development site – owned by  NORTHWOOD (RESIDENTIAL) LIMITED in Dublin. Northwood is already in receivership. Its directors are listed as William Kilmurray (64), Ben Underwood (63) and Anthony Donnelly (48). It is owned by John Shiel (12.5%), Globe Estates Limited (37.5%) and AWG Property Developments (Ireland) Limited (50%. Globe Estates Limited is owned by William Kilmurray. AWG Property Developments (Ireland) Limited. AWG is owned by Northern Ireland company AWG which is showing as a “closed company” though its former directors include Paul Devine, Stephen Kelly and Lesley Anne Wallace.

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

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NAMA sues Bank of Scotland

NAMA’s degree of transparency nearly matches that of the Irish court system. Today we learn that NAMA is suing Bank of Scotland, no less, but there is practically no chance of finding out in outline or in detail, NAMA’s grievance. We simply know that on 24th October, 2012 NAMA made an application to the High Court in Dublin – reference number 2012/4068 S – and that the applicant is National Asset Loan Management Limited represented by Dublin solicitors, Gartland Furey and the respondent is Bank of Scotland, and as is usual with recently-filed cases, there is no solicitor on record for BoS.

You might think you could get details of the application from the Court itself, but no, the Central Office at the High Court that unless you are a solicitor acting in the case, the papers including the application are out of bounds. Even if you’re a barrister.

NAMA doesn’t comment on individual court cases and BoS are unlikely to. So all we can say at present is this is NAMA’s 35th application in Dublin’s High Court this year and that the Agency has been on the receiving end of a separate additional six applications.

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On Wednesday this week, the NAMA chairman told an Oireachtas oversight committee that NAMA was working with two thirds of developers. The other one third has seemingly been subjected to foreclosure action – receivers, administrators and liquidators appointed and in some cases, the companies and individuals have been chased through the courts. The reckoning on here is that NAMA has had receivers appointed to over 200 companies but in some cases, individual companies may be part of the same group. So NAMA is generating a strong demand for insolvency professionals and we all know this. And less than two years ago, NAMA appointed panels of insolvency professionals for foreclosure work in Ireland and the UK.

So it came as a little bit of a surprise that yesterday the Agency issued a new tender for insolvency professionals. NAMA is seeking tenders for the following panels

(1) Insolvency Practitioners (corporate) for Ireland

(2) Insolvency Practitioners (corporate) for the UK

(3) Insolvency Practitioners (fixed charge) for Ireland and

(4) Insolvency Practitioners (fixed charge) for UK

Asked how these tenders sit with the existing panels and if the existing panels were being stood down, a NAMA spokesman would merely say this morning that the new panels are the ones from which appointments will be made.

NAMA said on Wednesday at the Oireachtas that it was not black-listing companies touched by the Enda Farrell affair, which will come as a relief to Ernst and Young, former employer of Enda Farrell’s wife, Alice Kramer.

The deadline date for submission of tenders is 19th November 2012 and the full tender document is available here.

UPDATE: 2nd November 2012. NAMA has “clarified” that there is no longer a minimum turnover for eligible tenderers. The previous requirement was E2m in each of the last three years. That requirement has now been removed. The clarification is here.

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Good news for those property professionals who have been having sleepless nights at the dwindling vacant office space in Dublin city centre – still over 20% though somehow the property companies are trying to convince us that 15% is the new 5% normal vacancy level. Junior finance minister at Brendan Howlin’s Department of Public Expenditure and Reform, Brian Hayes yesterday told the Society of Chartered Surveyors in Ireland that “being blunt, there is much greater value on the outskirts of Dublin and if we are serious about saving money not all functions need to be city centre based” So any imminent shortages in the Dublin city centre office market might be alleviated!

The junior minister was referring to plans to cut the Government’s expenditure on accommodation in its 2,200 buildings of which 900 are leased by the State at an annual cost of €112m in 2012 which the Minister wants cut to below €100m in 2015. Within certain echelons of official Ireland, eyebrows have been raised at the continued occupation of prestigious Dublin city centre buildings when rents can be 70% less just a 20-minute Luas jaunt away. It’s unclear when the NTMA’s lease on its HQ at Treasury Buildings expires or if the present receiverships of Treasury companies may affect the expiry date, but is there any reason it can’t be moved, perhaps closer to Dublin airport to facilitate meetings with all these international investors that NAMA keeps talking about – apparently there are locations available in Balbriggan and Swords!

We should not be surprised that the State’s property bill is coming down – the public sector employed 320,000 people in 2008 and it is intended that this should fall to 282,500 by the end of 2014. The Minister also referred to other streamlining measures in his speech. The Minister also referred to the construction sector and whilst we all accept that the sector in still on the floor, there were some rays of home given with accommodation needs for new enterprise.

The transcript of the Minister’s speech is here. Those attending were seemingly impressed by the Minister’s grasp of map-based inventories, standardised fitouts and other technical issues.

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