Archive for February 20th, 2013

Leona Flynn sues NAMA

We learn today from the Courts Service website that an individual, Leona Flynn, represented by what appears to be a tiny Dublin firm of solicitors Miley and Miley – no website apparently or email address – of 35 Molesworth Street in Dublin 2 is suing NAMA, or rather National Asset Loan Management Limited. The application was lodged at the High Court yesterday – reference 2013/1661 P – and as is usual with recently-filed cases, there is no solicitor on record for the respondent.

We don’t really know who Leona Flynn is, what the basis for her application is or what remedy or remedies she is seeking. Welcome to the Irish judicial system which would embarrass a Third World backwater, this despite having the most highly rewarded judges and lawyers in Europe.

NAMA generally doesn’t comment on individual litigation.

This is the practically the second time NAMA has been sued in Dublin’s High Court this year. There are 12 applications against a developer with NAMA and IBRC named also as respondents, all to do with a Portugese golf resort development. And there is this one.

NAMA itself has initiated five applications in Dublin’s High Court this year.

UPDATE: 13th March 2013. The Irish Independent today reports that, yesterday, the above matter came before Mr Justice Peter Kelly at the High Court. The applicant is Lee or Leona Flynn, wife of developer John Flynn and it seems that in February 2013, NAMA issued a €22m demand to the Flynns and their children in respect of an Anglo loan on Belfield Office Park.  Lee Flynn is claiming that following a transfer of her 10% interest in the property in 2008, she no longer has an liability in respect of the loan. NAMA has obtained a temporary injuction, which was continued yesterday, preventing distribution of the proceeds of a Dublin property, “Cooldrinagh” on Kerrymount Avenue, Foxrock, Dublin – the property is on the market with an asking price of over €3m and is famous for being Samuel Beckett’s former home. Lee Flynn is seeking declarations that she has no interest in Belfield and also that NAMA has no right to demand a statement of affairs from her. The Independent claims that a business plan by the family was rejected last Autumn 2012. The case returns before Judge Kelly on 22nd March 2013.


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So, you’re an employee of Irish Bank Resolution Corporation, or at least you were until two weeks ago when the Government appointed a Special Liquidator to that bank.

Now, you’re on a three-month contract, and you just might have the chance to join NAMA in August 2013, when the Agency will pick up any loans remaining unsold over the next six months. The betting on here is that at least 300 of the 1,000 IBRC staff will eventually be made redundant and they can look forward to statutory redundancy at the rate of two weeks for each completed year of service plus an additional week, all capped at €600 per week.

Meanwhile, should you be ultimately employed by NAMA, remember all NAMA staff earning over €200,000 have waived 15% of their salaries, whilst 30 IBRC staff, when presented with the same request, gave the finger to finance minister, Michael Noonan. So, even if you do get a job at NAMA, you may face a pay cut, and remember NAMA pays practically no bonuses at present.

So, if you are now working for IBRC, you probably aren’t the most motivated or committed worker, and who can blame you for having an eye on your future after the three month contract expires.

There are credible reports being received on here now that certain former IBRC employees might be displaying some personal initiative in offering their skills and knowledge to potential buyers of IBRC assets. There is nothing untoward about some of these contacts – if you’re facing a high probability of redundancy, then you should be looking to safeguard your income and career, so of course you will be looking for work, and talking to potential employers.

But, where there are grounds for concern, is in the possibility that privileged inside knowledge might be offered to potential purchasers by desperate employees facing an uncertain future from May 2013.

And there is no evidence that this concern is being addressed by the Special Liquidator or the Department of Finance.

And why would they be concerned? Remember that Ireland is a country where we take it on trust that senior civil servants and state employees will not use and abuse privileged information gleaned during their time at the heart of governance and Government, to the unfair advantage of their new employer. At least certain NTMA staff who have recently left senior positions at the Department of Finance are covered by the Official Secrets Act and the NTMA Act, both of which supposedly prevent the use of privileged information in new roles.

But, IBRC staff just had standard private sector contracts of employment, and are not covered by the Official Secrets Act or NTMA Act. And they have maximum three month contracts.

So, what this Government has done, is to create a situation where it has a large group of de-motivated, insecure staff involved in the sale of €16bn of state assets – loans mostly – to companies which may be their best hope of future employment. And during the Wild West next six months, there will be millions and maybe hundreds of millions made and lost.

With all respect to the staff at IBRC, what the Government has done is created a fertile breeding ground for rogue employees to sell their privileged inside knowledge in a market environment where €10s of millions are at stake (easily) and in some instances, there may be €100s of millions.

I wonder where this risk featured in the six months of planning which preceded the decision to liquidate IBRC on 6th February 2013.

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On this side of the Border, politicians, bankers, media, investors are all praying for a recovery in residential property prices and the venom unloaded on the recent Fitch prediction of a further 20% decline was remarkable. However, those same politicians, bankers, media and investors might do worse than to look at the actual experience of Northern Ireland and consider if Northern Ireland is indeed a pathfinder for prices in the Republic

Today, the Northern Ireland Statistics and Research Agency operating under the auspices of finance minister Sammy Wilson publishes its house price series for the three months ending 31st December 2012 – the report is available here. The headlines are – prices are down 3% in Q4, 2012 compared with Q3,2012 and are down a staggering 56.3% since the peak in Q3,2007. What is even more staggering is that UK inflation since Q3,2007 has been 18.7% and in real terms, Northern Ireland residential property is down 63.2%.

On this side of the Border, there has been some evidence of stabilization in H2,2012 though there was a decline of 1.1% in December 2012, but to date we are just 49.6% down from peak nationally and in real terms, because there has only been 1.6% inflation between September 2007 and December 2012, we are down just 50.4%, considerably less than Northern Ireland.

And remember Northern Ireland didn’t have such over-construction, and its vacancy level today is half ours. What Northern Ireland does have is a pretty savage foreclosure and repossession regime and in 2012, there were over 10 applications for repossession every single working day, compared to about 2 on this side of the Border despite us having 2.5 times the population.

And remember this is the league table of the world’s worst residential property crashes. Northern Ireland appears to be now out on its own at the top.


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NAMA’s pursuit of the €185m judgment it obtained against Sean Dunne last year, continued in a Stamford Connecticut court room yesterday where the Dunnes are, at this time, trying to have part of the NAMA case thrown out because, they claim, the US courts don’t have jurisdiction to hear part of NAMA’s case. You see, NAMA is claiming that there has been a fraudulent series of transfers between Sean Dunne and his wife Gayle, and the first big transaction that is being questioned, is the purchase and sale of a €4m apartment in Geneva, Switzerland. The Dunnes contend that Switzerland is not the US, that NAMA is not a US entity and that they, the Dunnes, are Irish, so there it is no right for the US courts to hear this part of the NAMA claim.

NAMA has alleged that a series of transactions, including at least three US property deals, have enriched Gayle at the expense of the Irish tax payer. So far, NAMA is not doing very well in its pursuit of the matter. Last summer, the US courts refused to grant NAMA a freezing order which would restrict the freedom with which Gayle could manage her affairs. The judge was critical of the NAMA case, with parts of it based on reporting in the Daily Mail. There is a full hearing scheduled for September 2014 – yes 19 months hence – and between now and then, there may be a series of interim hearings.

Yesterday’s hearing was a win for the Dunnes. The judge reportedly granted the Dunnes the right to “depose” NAMA CEO Brendan McDonagh and NAMA recovery manager John Coleman, though it should be said there is some confusion over the deposition of Brendan McDonagh this morning with sources disputing that aspect of the reporting. “Deposing” involves a person presenting themselves to the lawyers of your opponent, making a statement in relation to the case and being quizzed about the statement and about the case generally. NAMA had previously objected to either employee being deposed, claiming the Dunnes’ request was designed to “annoy, harass and oppress” NAMA. Yesterday, Judge Barbara Brazzel-Massaro sided with the Dunnes, and sometime in the near future, Brendan and John will need submit themselves for up to eight hours each to the Dunnes’ lawyers. Gayle Dunne is also making it clear that she intends pursuing NAMA for damage to her reputation (should the Dunnes win, of course).

It was claimed by the Dunnes yesterday that last week’s deposition of former NAMA asset manager Kevin Nowlan revealed that Kevin, who would have been closest to the detail of the Dunnes’ affairs, didn’t know of any fact to support a claim against Gayle. We don’t know what NAMA’s assessment of the deposition is.

It will reportedly be the 18th March, 2013 when we hear if the Dunnes were successful in having part of the NAMA claim excluded on grounds of jurisdiction. NAMA is fearful that if the Geneva component is excluded, it will make its case weaker because it won’t be able to tie all the components together in the full hearing in 2014.

The Irish Times , the Independent and RTE had reporters in the court room yesterday. Simon Carswell has the best and most detailed report.

Not only does Sean Dunne owe NAMA €185m but the Dunnes were the golden couple of the Celtic Tiger property boom, with Sean buying very expensive land in Ballsbridge with a vision of creating a better version of London’s Knightsbridge in Dublin. His glamorous wife Gayle is a former well-known columnist with the Independent. So the case has glamour, money, mansions and allegations of shenanigans so you can expect to see it reported in detail as it proceeds.

Finally, this is a holiday week in the US and unfortunately we were not able to get you live tweets and photographs of the proceedings yesterday. It is hoped that both sides’ documentation for yesterday’s hearing can be made available later.

UPDATE: 28th February, 2013. Although not yet available on PACER, Simon Carswell in today’s Irish Times reports that the judge handling the Dunne/NAMA case in Connecticut has ordered Gayle Dunne to disclose documentation to NAMA. However Judge Barbara Brazzel-Massaro has rejected NAMA’s request for documents going back all the way to 2004 and has instead imposed an order on Gayle going back to 2008, and further Gayle is entitled to withhold any documents – “concerning”, according to the Irish Times – Sean Dunne.  It is not clear what “concerning” means because NAMA’s whole case is about Sean’s wealth and its transfer to Gayle, so you would have thought that most documentation in Gayle’s possession would “concern” Sean. So a victory of sorts for NAMA, but with significant strings attached.

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