Archive for November, 2012

NAMA has this evening updated its enforced property list and there are now 1,497 properties shown, up from 1,430 at the end of September 2012. Of course you can’t simply deduce that NAMA has added 67 properties (1,497 minus 1,430) during October 2012 because some properties might have been sold or otherwise removed from the list during the month.

To see what’s new – which you might have thought would be the top priority of regular observers of NAMA property – you have to crawl through 150 pages of listings. To see what has been sold during the month, you have to do the same. Seriously.

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The recent trickle of enforcement action by NAMA continues, with today’s edition of Iris Oifigiuil revealing that NAMA has had receivers appointed to three new companies,  two of which are controlled by Galway developer Mike Finn (Michael Finn) and his wife Claire. Mike was the developer behind The House Hotel and Spanish Arch Hotel, both in Galway city.

(1) Rathcollon Investments Limited. On 28th November 2012, NAMA had Edmund Douglas of Douglas Newman Good appointed receiver to certain assets of the company. The company is owned by Michael Finn (50%) and Claire Finn (50%) and the directors are Mike Finn (51) and Claire Finn (49).

(2) Rathrippon Developments Limited to which NAMA again had Edmund Douglas of Douglas Newman Good appointed receiver to certain assets of the company on 28th November 2012. It has the same directors as Rathcollon (above) and is 100% owned by Rathcollon.

(3) MN Developments Limited. On 27th November 2012, NAMA had Ken Fennell of Kavanagh Fennell appointed as receiver to the former St Mary’s GAA grounds at Rosslare, county Wexford. The company is controlled by Hugh Murphy (50%) and PN Holdings (50%). PN Holdings is one of the late Pat Neville’s companies. The directors of the company are listed as Hugh Murphy (54), Ann Roche (44) and Pat Neville (63, but who died earlier this year)

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

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There was a little ripple of concern on here in comments recently after the Sunday Independent reported on the accounts for Harcourt Developments for 2011. Harcourt is controlled by Pat Doherty – pictured above left, with George Mitchell at the Titanic exhibition in Belfast city centre – and Pat is understood to be one of the top developers working with NAMA with an approved business plan.

What prompted some consternation was the statement “Harcourt Developments paid its directors fees of just over €1.25m last year [2011]” and “the company has paid consultancy fees to a number of directors in respect of services rendered during the year. Payments under these arrangements totalled €337,787 [in 2011]” This was all in respect of eight directors, so adding the €1.25m to the €337,787 and getting €1,587,787 and dividing that by eight, we get an average payment to each of the directors including consultancy fees of €198,473 in 2011.

NAMA says it is allowing payments of €200,000 in three cases, believed to be Dundrum’s Joe O’Reilly, Ballymore’s Sean Mulryan and recent defamation case victor, Michael O’Flynn. Beyond that, NAMA says that it pays 25 developers salaries of between €150-199,000 and which total €4.2m of an average of €168,000. The concern was that NAMA wasn’t being straight with us, and that it was allowing developers to sneak away with additional remuneration in the form of  “consultancy fees”


Not so, says Minister for Finance, Michael Noonan who was this week responding to questions from the Sinn Fein finance spokesperson Pearse Doherty. Asked about the maximum remuneration at NAMAinclusive of pension contribution and consultancy fees, Minister Noonan says “NAMA has no agreements in place with debtor principals which authorise them to retain total remuneration in excess of €200,000 from their assets or businesses.“

So despite appearances, it seems that remuneration at Harcourt is in line with the perception of NAMA policy.

The full parliamentary questions and responses are here.

Deputy Pearse Doherty:  To ask the Minister for Finance further to a report in a Sunday newspaper, if he will confirm the maximum salary approved by the National Asset Management Agency at Harcourt Developments is €200,000.

Deputy Pearse Doherty:  To ask the Minister for Finance if he will confirm the maximum annual remuneration approved by the National Asset Management Agency at any of its developers, inclusive of pension contribution, consultancy fees and allowances.

Minister for Finance, Michael Noonan :  I propose to answer question 222 & 223 together.

I am advised by the National Asset Management Agency (NAMA) that information relating to its debtors and properties within their control is, within the meaning of Sections 99 and 202 of the NAMA Act 2009, confidential and that it is therefore precluded from discussing such matters.

As detailed in a response to the Deputy Gerry Adams (Ref No: 39693/12, 20th September 2012), NAMA has no agreements in place with debtor principals which authorise them to retain total remuneration in excess of €200,000 from their assets or businesses.

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Imagine one of those post-match interviews when Republic of Ireland manager, Giovanni Trapattoni  is explaining how the defeat could have been a lot worse, imagine a question being put to Trap and the pretty lady translating it and whispering in the Italian’s ear and then an outburst “whatta you mean, paycut, I ainta takin some fubbin paycut” except in my imagination, Giovanni miraculously finds the English to express himself in perfectly modulated received pronunciation and gives us an erudite lecture in contract law.

So Giovanni earns about €1.5m a year, and soccer-mad tycoon Denis O’Brien is believed to pay half of this out of his own pocket. I say “tycoon” Denis O’Brien, but he goes by different monikers – there’s “telecoms mogul” after the apparent success of his Esat and subsequently, Digicel, ventures, there’s “media mogul” as he was described in Britain when his jointly run Irish Daily Star published pap-pics of Kate’s kittens. One moniker you won’t have heard is “property developer” and yet, Denis is associated with a string of property deals in Ireland and elsewhere. For example, Denis reportedly paid €23m for an office block on St Stephen’s Green in Dublin city centre in 2001, with the intention of developing the property and there was a €15m 3-acre former UCD site in Dublin which the Sunday Business Post reported was intended for residential development.

And Denis was one of Anglo’s major borrowers. We know this because the Sunday Independent published an article in April 2012 which reported on Anglo’s biggest borrowers, and subsequently we heard from the chairman of the Independent News and Media group, James Osborne that Denis was unhappy with the article and had, according to then-chairman James, wanted the article pulled from the paper. It should be stressed that the Sindo reported that all of Denis’s loans with Anglo were performing in the sense that not a single interest payment had been missed and that since 2009 when Denis owed a reported €833.8m to Anglo making him the sixth biggest borrower at that bank, Denis had paid down a substantial amount on his loans. Of course Denis might have loans from other NAMA Participating Institutions as well, and who knows, he might have given some business to his former employer, the Bank of Ireland on whose board or “court” he served for a year, as deputy chairman or “deputy governor” between September 2005 and September 2006.

Anglo is one of the five financial institutions from which NAMA acquired loans. There was a €5m threshold on borrowings at Anglo, above which NAMA acquired loans if they were connected to property development. And if you had any development lending, NAMA acquired associated lending as well, whether that lending was to fund the purchase of shares in media companies, or to build loss-making radio businesses or to acquire mobile phone licences in some of the most corrupt countries on this planet according to Transparency International, such as Haiti, Papua New Guinea, Guyana, Honduras, Soloman Islands, Surinam, Tonga, Trinidad and Tobago, Jamaica, Panama, El Salvador, Vanuatu and Samoa.

So why is Denis O’Brien not in NAMA?

We learned in the High Court case brought by Paddy McKillen against NAMA that property lending wasn’t necessarily a criterion for acquiring loans, and in the case of Paddy McKillen, NAMA argued that the value of his loans – over €2bn –  was “systemic” to the Irish banking system even if only €30m or so related to what might properly be called property development (as opposed to property investment).

Denis isn’t the only Anglo borrower to escape NAMA’s clutches. Sean Quinn senior who has €2.9bn of loans from Anglo – €2.4bn of which is disputed by Sean in a case which will come before the courts in 2013 – and as we know Sean did have loans secured on an international portfolio of property. But NAMA left Sean alone, possibly because of concerns over the recoverability of the loans. If I were in the Quinn camp, I might be seeking to find out why NAMA left Sean’s loans at Anglo.

But what possible reason was there for leaving Denis’s loans at Anglo?

If Denis’s loans were acquired by NAMA, then Denis would potentially face restrictions on his lifestyle. NAMA famously imposes a €200,000 cap on salaries to its developers. NAMA doesn’t look kindly on private aviation, so the jet which has taxied President Bill Clinton around the globe might have to go, and NAMA also generally bans charitable donations and sports sponsorship. And you would imagine, paying half the €1.5m salary of the Republic of Ireland manager would be particularly frowned upon by the NAMA martinets.  Of course, if all the loans were fully performing, including maintaining loan to value covenants for property, then the borrower can live their lives as they wish, but after a 67% decline from peak in Ireland, not much commercial property lending is fully performing when applying the LTV covenant.

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NAMA sues Seamus Downes

More evidence of NAMA’s litigation activities today with the Courts Service revealing that the Agency is suing an individual, Seamus Downes. The application in Dublin’s High Court was made on 28th November, 2012 and the case reference is 2012/4456 S. The applicant is National Asset Loan Management Limited, represented by top tier solicitors firm Eversheds. The respondent is merely named as “Seamus Downes” and as is usual with recently-filed cases, there is no solicitor on record for the respondent.

For the non-Irish audience, our very expensive but oftentimes primitive judicial system doesn’t allow third parties to access court records, so we can’t even confirm  the identity of the respondent, let alone the examine the outline of the case or remedy sought by NAMA. There was a Seamus Downes that was sued by NAMA earlier this year in an action which also named Limerick solicitor and developer Paul O’Brien as a respondent. It should be stressed that we don’t know if this is the same Seamus Downes now being sued on his own by NAMA.

In the past, NAMA has taken legal action against individuals to enforce personal guarantees or to secure personal judgments, but it should be stressed that we do not know if either of these objectives lies behind the current application. NAMA doesn’t comment on individual cases, not even to confirm the identity of the respondent.

So far this year, NAMA has launched 37 separate actions in Dublin’s High Court and has been on the receiving end of six.

UPDATE: 24th April, 2013. NAMA has confirmed in its Q4,2012 report that it is pursuing Seamus Downes for €5,840,000.


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Earlier this week, we learned that a NAMA developer, Holtglen, was pursuing a legal action to have the mighty Dunnes Stores wound up on foot of an outstanding judgment relating to a Waterford shopping centre of €21m. Holtglen is insolvent and is being supported by NAMA and it was revealed that Dunnes Stores Margaret Heffernan had been writing to NAMA trying to stave off the winding-up petition. NAMA is having none of it, and wants its money – if Holtglen was an IBRC borrower then Dunnes might have been more successful. The winding up petition is set to be heard on 14th December 2012.

Yesterday, we learned via The Phoenix magazine – subscription required – that in Tallaght, west Dublin, the management company for The Square shopping centre is pursuing Dunnes for €800,000 of allegedly outstanding service charges. Dunnes is one of the anchors of The Square, a mid-market shopping centre opened in 1990.The management company, The Square Management Limited is seemingly  controlled by solicitor and property developer and erstwhile art collector, Noel Smyth – now resident in London, apparently – and The Phoenix reports that NAMA has acquired loans provided to Noel Smyth’s company. Given the management company has accumulated losses of €15.5m according to The Phoenix, it would seem that the hands of NAMA will be all over this legal action which was initiated on 7th September 2012 – reference 2012/9067 P. The case appears set for hearing in January 2013.

According to the Courts Service, The Square Management Limited is represented by Noel Smyth and Partners, and Dunnes is represented by Arthur Cox. Lastly The Phoenix reports that Dunnes was told, presumably by a judge, that it needed to pay up €400,000 now in advance of the substantive hearing.

So, it seems that NAMA has extra incentive to play tough with Dunnes. It is interesting that Dunnes is represented by Arthur Cox, a company revealed on here yesterday as being No 4 in the league table of payments to solicitors by ….em, NAMA in 2012. No wonder Irish people have a reputation for being builders – given all the Chinese Walls we’ve constructed at so-called “professional firms”, it’s a wonder we have any competition globally in the construction business, at all.

I was shocked to see that there were about 80 applications in Dublin’s High Court against Dunnes Stores in 2011 and this year, the outlook for annual volume of applications is similar. Mind you, Tesco appears to be on the receiving end of a similar number of applications.

UPDATE: 3rd December 2012. In an unrelated case, the judgment in the case taken by developer and promoter Harry Crosbie and his Point Village development in north Dublin Docklands against Dunnes has now been published by the Court Service here. There’s a summary from the Irish Times here. A further summary is Harry partially won his case, but he needs find some more tenants for the Point Village before he can compel Dunnes to fulfil their part of the contract.

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Remember Fir Tree?

Back at the start of 2011, these hedge fund upstarts from the Cayman Islands took exception to the attempts by Anglo Irish Bank – as it then was, it’s now IBRC having merged with Irish Nationwide – to impose losses on their USD 200m of subordinated bonds. True, Anglo has required a €29.3bn bailout from the nation as a whole, but that’s just too bad in the cutthroat world of hedge funds. So Fir Tree reached for their lawyers and initiated legal action in New York in February 2011, to stop Anglo imposing any losses on their holding of subordinated bonds.


Reporting in Irish media on the case seems to have dried up, but a search through US court records indicates that in December 2011, Fir Tree appealed a decision by a NY court and the case is set to be heard at an appeal court in March 2013. The record on the US court service PACER – not available without subscription – for the appeal court hearing is shown above – note the dates are in the US format mm/dd/yyyy.

Meantime, Fir Tree continues to be paid its interest as normal. And not only that, Minister for Finance Michael Noonan has confirmed that he has NOT “invited Fir Tree directly or indirectly to take voluntary losses on its subordinated notes. IBRC has a contractual obligation to pay interest and principal on the notes.” By this standard, Fir Tree is wiping the floor with our own Department of Finance.

Although our Minister for Finance Michael Noonan might boast about the €5bn of losses imposed on subordinated bondholders since Fine Gael took office in March 2011 – this, after Fianna Fail had previously imposed losses of some €10bn on subordinated bondholders since 2008 – in truth, there is the potential for a lot of these losses to be clawed back by subordinated bondholders. Fir Tree is fighting like a terrier in New York. And on this side of the pond, in London, a German company won a British High Court case against Anglo last summer which may mean that IBRC has to stump up additional tens if not hundreds of millions of euro in compensation to burned subordinated bondholders. That victory by Assenagon Asset Management has been appealed by Anglo, and we await the outcome of the appeal hearing in 2013. And in London also, former Bank of Ireland subordinated bondholders continue to press their case in the courts for further compensation after their “burning”.

You won’t have heard Minister Noonan or junior minister Brian Hayes recently boasting about the famous €5bn burned by them at a cost to subordinated bondholders. This curious silence might be due to the raft of legal cases, where the ministers presently appear to have the weaker hands.

The revelations about Fir Tree came about in a response to a parliamentary question by the Sinn Fein leader Gerry Adams to the Minister for Finance Michael Noonan in the Dail this week.

Deputy Gerry Adams: To ask the Minister for Finance further to Parliamentary Question No. 240 of 13 November 2012 if he will confirm the reason he has not sought either voluntary or involuntary write downs from Fir Tree on their subordinated debt holdings of Anglo which are costing the taxpayer interest payments every quarter and will cost taxpayer $200 million by 2017; if he will confirm if Irish Bank Resolution Corporation management has sought voluntary write downs from Fir Tree on their subordinated debt holdings of Anglo and if not if he will consider directing IBRC management to seek voluntary write downs from Fir Tree on their subordinated debt holdings; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan :  I have been advised that Fir Tree was invited to participate in IBRC’s liability management exercise in 2010 to take a voluntary loss. However, Fir Tree opted not to participate.  If write down opportunities present themselves, they will be considered by the Bank. I have not invited Fir Tree directly or indirectly to take voluntary losses on its subordinated notes. IBRC has a contractual obligation to pay interest and principal on the notes.

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The regular audience on here will be aware of the faux concern previously shown for the legal profession, which followed the publication of the NAMA accounts for the first and second quarters of 2012 – only €23,000 was spent in Q1, 2012 on legal fees and although Q2,2012 was better for the legal fraternity with €887,000 spent on legal costs, it was still a drop in the ocean compared to the NAMA budget of €25m for legal costs in 2012.

And why has NAMA spent so little on legal costs? Doesn’t the Agency realize that hordes of Dublin solicitors and barristers might be reduced to chasing ambulances to replace expected business from NAMA, who else will pay their fees which, after Moscow’s, are the highest in Europe?

Minister for Finance Michael Noonan was asked about this worrisome state of affairs. And his reply in September 2012 was

“I am advised by NAMA that legal fees for the first quarter of 2012 are low relative to budget for a number of reasons. Some fees actually paid in the quarter related to legal work which was in progress at the end of 2011 and had been accrued in the Q4 2011 accounts. In addition, the budget of €25m for 2012 included prudent assumptions on potential litigation costs which have not to date emerged. In addition, some of the legal fees incurred by NAMA are regarded as recoverable from the debtor and do not form part of its administration expenses. NAMA’s expectation is that the outturn for legal costs in 2012 will be significantly less than the €25 million budgeted.”

However, we find out this week that NAMA has in fact been spending many millions on legal fees this year. It’s just that the Agency has not been showing these costs in what would be considered the usual place in its financial statements – the profit and loss account. No, because the Agency has in the main been spending the money on lawyers who have in turn been dealing with NAMA’s lending to developers, what NAMA has done is assumed it will be reimbursed the legal fees and NAMA has been adding the legal fees to the developers’ loans which are shown in the balance sheet. No, seriously, that’s what NAMA have been doing. Not only that, because there is no breakdown of loans in the balance sheet, we have hitherto been unable to appreciate this phenomenon, or the extent of it.

And as for Minister Noonan and his “NAMA was being prudent with its assumptions”, it seems negligent of Minister Noonan to comment on just €23,000 shown as spent by NAMA on legal fees whilst ignoring €7.766m being incurred by NAMA and added by NAMA to loans owed by its developers. The analysis of €7.766m spent to date this year by NAMA is shown below:

NAMA’s real legal costs were revealed in a response from Minister Noonan to the Sinn Fein leader Gerry Adams this week. The response isn’t online, but is contained in this letter from Minister Noonan to Deputy Adams. The letter was previously reported in the Irish Examiner, though they failed to realize the significance of the revelation in relation to NAMA’s accounting or previous reporting.

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The Nationwide Building Society has published its UK House Price data for November 2012. The Nationwide tends to be the first of the two UK building societies (the other being the Halifax) to produce house price data each month, it is one of the information sources referenced by NAMA’s Long Term Economic Value Regulation and is the source for the UK Residential key market data at the top of this page.

The Nationwide says that the average price of a UK home is now GBP 163,853 (compared to GBP 164,153 in October 2012 and GBP £162,764 at the end of November 2009 – 30th November, 2009 is the Valuation date chosen by NAMA by reference to which it values the Current Market Values of assets underpinning NAMA loans). UK prices have declined by 1.2% in the past 12 months and are now 11.9% off the peak of GBP £186,044 in October 2007. Interestingly the average house price at the end of November 2012 being GBP £163,853 (or €202,663 at GBP 1 = EUR 1.2346) is 29% above the €157,360 implied by applying the CSO October 2012 index to the PTSB/ESRI peak prices in Ireland.

With the latest release from Nationwide, UK house prices have risen 0.7% since 30th November, 2009, the date chosen by NAMA pursuant to the section 73 of the NAMA Act by reference to which Current Market Values of assets are valued. The NWL Index is now at 790 (because only an estimated 20% of NAMA property in the UK is residential and only 29% of NAMA’s property overall is in the UK, small changes in UK residential have a negligible impact on the index) meaning that average prices of NAMA property must increase by a weighted average of 26.7% for NAMA to breakeven on a gross basis.

The next forecast from the UK’s Office for Budget Responsibility which independently monitors and comments on the UK economy is due out on 5th December 2012. According to the OBR’s current forecast, house prices are projected to fall by 0.4% in 2012 before increasing by 0.1% in 2013, 2.5% in 2014 and 4.5% in 2015 and 4.5% also in 2016.  UK inflation has now come down below 3% per annum despite being elevated since the banking crisis in 2007, overall inflation in 2012 is set to stay close to 3%  – remember that UK inflation has increased by nearly 18% since their peak in October 2007 whereas in Ireland inflation has been subdued and is less than one third of that – the UK has pumped GBP0.3tn of “quantitative easing” into its GBP1.5tn economy and another GBP50bn has recently been announced. UK interest rates may increase later this year to combat inflation – the base rate has been 0.5% since February 2009.The UK economy is officially projected to grow by an anaemic 0.8% in 2012 in real terms, close to our own Department of Finance’s projection for Ireland at 0.9%.  However both the Bank of England and the Confederation of British Industry have recently projected nil growth or recession in 2012.

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I wonder does Sean Quinn senior have access to the internet in Mountjoy? If he does, I hope he doesn’t choke on his cornflakes this morning if he reads the breaking report from Simon Carswell at the Irish Times  which states that IBRC, formerly Anglo and Irish Nationwide, is suing its former auditors, Ernst and Young and the “case relates to the firm’s role as auditors before the bank’s nationalization” Later in the article, the Irish Times states “The timing of the action is thought to be aimed at beating a six-year legal time limit that would have blocked the action.  Ernst & Young signed off the bank’s accounts for the year to the end of September 2006 on December 5th, 2006. These accounts are believed to be crucial to the bank’s legal action.”

So when Sean’s big case against IBRC comes before the courts next year, this action against the auditors might be crucial, and no doubt Sean’s legal team – if he has one, beyond his son-in-law – will surely seek discovery of the details of the newly lodged claim. Next year, Sean will be arguing that he doesn’t owe IBRC some €2.4bn of loans provided to him by Anglo, apparently for the purchase of Anglo shares. It has been a continuing theme pushed by the Quinn camp that Sean was relying on false accounts when making his investment decisions, that and the claim the loans are “tainted with illegality”. It is hard to see how IBRC’s case against Ernst and Young won’t be relevant to Sean’s big case next year.  Sean was reported to have built up a 5% stake in Anglo by January 2007, though by mid-2008 he had amassed an interest in the bank which could have led to him controlling 28% of the shares.

On here, there is relief that IBRC has at last been prodded into action. In September 2012, Minister Noonan responded to questions in the Dail and incredibly claimed that IBRC couldn’t identify the “principal person or persons” at Ernst and Young responsible for the audits. Minister Noonan was just about able to identify the auditor at Irish Life and Permanent who signed off the accounts. In June 2012, Minister Noonan (again!) washed his hands of mistakes in loan documentation at the banks which meant that NAMA acquired €455m of loans without paying a cent. There just didn’t seem to be interest at an official level in pursuing the auditors, at least to establish if there was any culpability in signing off the accounts based on poor records or inaccurate information.

Last week, it was reported that Ernst and Young’s revenues in Ireland have rocketed to €130m a year. This is the company which until recently employed Alison Kramer (Alice Kramer), wife of disgraced former NAMA employee, Enda Farrell.  To many people, it will be amazing that it is four years after the disastrous banking guarantee to stop the banks collapsing, that the first-known legal action has been initiated against an auditor of a bank. Here’s a reminder of the auditors in the banks during the boom/bust.

In a separate but related matter, there doesn’t appear to have been any progress in the case taken by the administrators of Quinn Insurance against its former auditors, PwC.

UPDATE: 29th November 2012, the Daily Business Post is reporting a response from Ernst and Young which reads “We have consistently said we stand by the quality of our work performed in the Anglo audit and will vigorously defend any such proceedings” – It should be remembered that at the moment, Ernst and Young are at a disadvantage because they have not yet seen the application by IBRC, which highlights another backwoods aspect of the Irish judicial system: the whole world can know that you are being sued, and the suing party can issue a statement, yet you might not see the application from the courts for some time. It never ceases to amaze how we can have such an expensive legal system with such third-world standards.

UPDATE: 11th December 2012. In the Dail today the Minister for Finance Michael Noonan was asked by the Sinn Fein finance spokesperson Pearse Doherty to provide an outline of the case being taken by IBRC against Ernst and Young and to describe the remedies sought in the application. The Minister point-blank refused to answer the question. So we have a position in Ireland where a 100%-state owned entity is suing a company and we cannot obtain details of the application from the Court Service and the Minisrer who is the sole shareholder in the bank refuses to provide any information. This is the full parliamentary question and response.

Deputy Pearse Doherty: To ask the Minister for Finance further to the recent application by the Irish Bank Resolution Corporation in the High Court where a company (details supplied) is named as the respondent, if he will provide an outline of the application and remedies sought by IBRC..

Minister for Finance, Michael Noonan: IBRC have advised me that it issued proceedings on 27 November 2012 against the company referred to in the question. These proceedings relate to the role of that company as auditors to Anglo Irish Bank Plc. pre-nationalisation. As this matter is now the subject of litigation, it would be inappropriate for me to comment further at this time.

UPDATE: 17th December, 2012. RTE reports that the case came before Judge Kelly in the High Court today, that IBRC is suing Ernst and Young for “in excess of €50m” which is a little less than E&Y’s annual revenue of €130m in Ireland.  RTE reports that the case relates to “so-called “bed and breakfasting” transactions that are alleged to have taken place over a period of years”. Judge Kelly has agreed that the case be transferred to the Commercial Court division of the High Court and set a hearing for 20th May 2013. No further detail is given on the meat of the case so we don’t know if the “bed and breakfasting” relates to directors’ loans being redeemed at year end via transactions with Irish Nationwide Building Society or if the “bed and breakfasting” relates to €8bn of cash deposits at year end from Irish Life and Permanent which had the effect of allegedly flattering the accounts of Anglo – the “bed and breakfasting” might relate to either, none or both of these matters.

UPDATE: 18th December, 2012. The usually-reliable Mary Carolan in the Irish Times today elaborates on yesterday’s proceedings. The application relates to the chairman Sean Fitzpatrick’s personal lending from the bank which had been masked in the accounts with year end refinancing at Irish Nationwide Building Society. It is reported that at in November 2006, Sean had €69m of loans and afterwards was advanced an additional €58m and now, all of Sean’s lending is classed as impaired and the bank expects to suffer losses of “well over €50m”, according to the report today. Ernst and Young are blamed for not picking up on the annual refinancing at year in 2006, and the implication is that if they had, then the bank might have taken steps to reduce the exposure before the property and bank crashes, and ultimately Sean leaving the bank and being declared bankrupt.

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