At last week’s presentation by the NAMA chairman Frank Daly (pictured above) in Dublin, he stated that NAMA “expects to realise about €750 million by reversing asset transfers by certain debtors and taking charges over previously unencumbered assets – up from a previous estimate of €500 million.”
This claim raised some eyebrows, and some developers with knowledge of NAMA’s operations were skeptical about the claim. In the Dail this week, the Sinn Fein finance spokesperson Pearse Doherty quizzed the Minister for Finance Michael Noonan about the NAMA claim.
NAMA is saying “the granting of charges over additional security, where such security exists, is a required demonstration of a debtor’s willingness and capacity to work with the Agency to achieve the best possible outcome for the taxpayer and that debtors receive no consideration for providing such security as their NAMA debt obligations are generally in excess of such amounts provided to NAMA”
This is quite astounding if true. Developers, who by their general nature, tend to be shrewd businessmen who don’t yield anything they don’t need to, are putting €750m on the table for NAMA as a “willingness and capacity to work with the Agency”. Not only that, but NAMA has already obtained charges over such property worth an impressive €642m. In other words, the €750m isn’t pie in the sky, NAMA has already snaffled 86% of the €750m announced.
The Minister also said that NAMA requires “the reversal of asset transfers to relatives and others, where they have occurred.“ Of course some of these transfers might be iffy, that is, they might have been executed at a time when the developer might have been considered insolvent. Other transfers however, might be perfectly lawful as part of the risk and wealth management that rich folks do.
So NAMA’s achievement is on the face of it very impressive indeed.
Minister Noonan was also asked for the basis of the quite staggering €750m of assets it says it expects to acquire but there was no response to that question.
These are the full parliamentary questions and responses.
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement by the National Asset Management Agency on 21 February 2013 that it expects to realise about €750 million by reversing asset transfers by certain debtors and taking charges over previously unencumbered assets up from a previous estimate of €500 million money realised from these sources will be used to pay down debts owed to the taxpayer; if NAMA can confirm if any of these transfer reversals were made as a condition of approving a business plan; and if so, the volume and value of transfer reversals made under this condition..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement by the National Asset Management Agency on 21 February 2013 that it expects to realise about €750 million by reversing asset transfers by certain debtors and taking charges over previously unencumbered assets up from a previous estimate of €500 million money realised from these sources will be used to pay down debts owed to the taxpayer; if NAMA can confirm the actual volume and value of asset transfer reversals achieved to date; and the basis for the valuation of the asset transfer reversals..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement by the National Asset Management Agency on 21 February 2013 that it expects to realise about €750 million by reversing asset transfers by certain debtors and taking charges over previously unencumbered assets – up from a previous estimate of €500 million money realised from these sources will be used to pay down debts owed to the taxpayer if NAMA can confirm if any consideration was provided to the developer or the transferee in return for agreement to reverse the transfer..
Minister for Finance, Michael Noonan: I propose to take questions 96, 97 and 98 together.
NAMA advises that, to ensure that debtors repay their debt to their full capacity, it requires, inter alia, that they provide security over unencumbered assets not previously pledged as loan security, where such assets exist, and the reversal of asset transfers to relatives and others, where they have occurred.
NAMA advises that, in this way, since inception to date it has obtained charges over additional security with an aggregate value of approximately €642 million, and that it is in the process of taking security over further assets identified in the course of its intensive engagements with debtors. In the past week, the NAMA Chairman publicly stated that the Agency expects, after all negotiations have completed, to obtain about €750 million by taking charges over previously unencumbered assets and by reversing assets transfers by certain debtors. NAMA advises that the realised proceeds from these sources will be used to pay down debts owed to the taxpayer by these debtors.
NAMA advises that the granting of charges over additional security, where such security exists, is a required demonstration of a debtor’s willingness and capacity to work with the Agency to achieve the best possible outcome for the taxpayer and that debtors receive no consideration for providing such security as their NAMA debt obligations are generally in excess of such amounts provided to NAMA.
NAMA Wine Lake 
“NAMA says it has obtained charges over €750m of developers’ assets without providing any consideration…
…and that debtors receive no consideration for providing such security as their NAMA debt obligations are generally in excess of such amounts provided to NAMA.” – Forbearance by a creditor from enforcement of existing security, seeking judgment or applying for liquidation or bankruptcy is generally reckoned to be adequate consideration in such instances for contractual purposes.
“Of course some of these transfers might be iffy, that is, they might have been executed at a time when the developer might have been considered insolvent.”
Outside of liquidations or bankruptcies, solvency at the time of the transaction is only a factor when considering whether a conveyance is “fraudulent”, it’s not the only test.
“Other transfers however, might be perfectly lawful as part of the risk and wealth management that rich folks do.”
Unless, of course, there is a finding of intent to place those assets beyond the reach of creditors, whatever elaborate window-dressing might be contrived by the transferor.
@NWL
Well the €750 million is impressive.
But it could also be seen as the immediate and very foreseeable cost of not appointing receivers on day one.
In essence the €750 million lost, and now in the process of being retrieved, is a fraction of the cost of the idiotic policy error of the NAMA board in not appointing receivers and in going with the strategy of ‘working with’ developers.
There are cases where Developers are successfully working with/for the Agency and getting well paid for it.
The naiveté of some is really unbelievable. NAMA are paying developers to “work” for the Agency because they are cheaper than the alternative – the receivers, and because they have a “long knowledge” of the assets and possess the skills in property management that the receivers do not have.
But it is an unequal and noxious relationship. To believe that NAMA is their “friend” and that it will not shaft them when they are of no further use just shows what suckers some developers are.
The NAMA executives are duplicitous, have no communication skills whatsoever (they are trained in this regard) and are process led.
In other words, while the developer is part of the system all is smooth and quiet, but when the sales and management is complete – the process ends and the question becomes “Can anything further be squeezed from the gullible eejits?”
That’s when even the most credulous will realise that they have been duped.
P.S. The clever ones are taking a twelve month vacation in the UK. They return free and clear.
You would wonder are they seen as clever or as people who run away when things dont go there way and leave there mess(And in some cases involving the Dublin Boys its rather big) for others to sort. Its a shame really that we are losing good people from the process but a fair few should never be allowed back at any table.
A) 12 months in the Cotswolds, followed by a clean sheet.
B) 5 to 7 years working for a dictatorial NAMA for peanuts,with an uncertain future; followed by removal of any assets you may have left or managed to accumulate at the end of the period.
Choose?