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Archive for April 23rd, 2013

Given that Ian Kehoe first reported the NAMA move to have receivers appointed to assets controlled by developer and impresario Harry Crosbie, this is really just a house-keeping entry to record the details published today in Iris Oifigiuil. The companies are owned by Harry Crosbie and Henry Crosbie whoappear to be one and the same person, both aged 68.All of the appointments were made on 17th and 18th April 2013 and in all cases, Paul McCann and Stephen Tennant of Grant Thornton were appointed statutory receivers to certain assets of the companies. Harry and Henry Crosbie appear to be one and the same person, both aged 68. We know that the two main assets affected by the receivership are the Point Village and the Bord Gais Theatre, trading at neither is affected by the receiverships.

(1) Blueboy Studios Limited. Directors John Dunne (40) and Auke Van Der Werff (59). Owned by Shoal Trading Limited (99%) and Henry Crosbie (1%). Shoal Trading Limited is owned by Henry and Rita Crosbie.

(2) Ossory Park Management Limited. Directors John Dunne (40) and Auke Van Der Werff (59). Owned by Shoal Trading Limited (99%) and Henry Crosbie (1%). Shoal Trading Limited is owned by Henry and Rita Crosbie.

(3) Grand Canal Theatre Company Limited. Directors Trevor Bowen (64) and Auke Van Der Werff (59). Owned 100% by Harry Crosbie.

(4) Point Village Development Limited. Directors John Dunne (40) and Auke Van Der Werff (59). Owned by Point Village Company Limited which is 100% owned by Harry Crosbie.

(5) Point Village Company Limited. Directors John Dunne (40) and Auke Van Der Werff (59). Owned 100% by Harry Crosbie.

(6) Henry A Crosbie (Entertainments) Limited. Directors John Dunne (40) and Auke Van Der Werff (59). Owned by Harry Crosbie (50%) and Rita Crosbie (50%)

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

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Last weekend, the Sunday Times published its annual rich lists for the UK and Ireland. The Sunday Times regards Ireland as the island, Republic and Northern Ireland, and it compiles a separate list of the Top 250 richest in Ireland. Given the world-class collapse in the Irish property sector at the end of the last decade, you might be surprised to see  any wealth remaining in property, and indeed there are practically no NAMA developers apparent on the list, but there is a sizable number whose wealth remains in property.

It should be said upfront, that the Sunday Times survey is based on estimation and may contain inaccuracies. It is supposed to encompass Irish-born wealthy. I was surprised to see that businessman and developer Paddy McKillen didn’t make it onto the Rich List at all, whilst his rivals for the Maybourne group of hotels, the Barclay brothers are on the UK Rich List and are said to be worth nearly €3bn, or GBP 2.35bn to be precise. Paddy did appear in some previous editions of the Rich List and in 2009 was said to have been worth about €75m.

Also it should be said that many of Ireland’s richest people have property holdings but are not primarily known for their property investments. For example Digicel’s Denis O’Brien is Ireland’s 2nd richest person with wealth estimated at €4bn and Denis has a portfolio of Irish property including here, but that is not his main source of wealth. Larry Goodman is said to be worth €613m and his wealth is attributed to meat but we know that he has considerable property interests as well. So,perhaps it is better to treat this list as a bit of fun; this is the list of those the Sunday Times believe are in the Irish Top 250 whose primary source of wealth is, or includes, property.

Michael Smurfit (€468m), owns the K Club, homes in Ireland, Monaco and Spain

Stephen Vernon (€334m) this is his stake in Green Property which owns the Blanchardstown Shopping Centre

Bert and Maurice Allen (€315m) They sold the Bewley hotel chain in 2007 for €225m and have a property and investment portfolio worth about €300m today.

George, Henry and John Sisk (€310m) This is construction wealth but they are involved in developments, including the NAMA development of Greystones Harbour.

Joseph and Jean Brennan (€235m), the bakers but are also said to have a €150m investment property portfolio

Neil Taylor (€235m) owns 2,000 German apartments#

Charles and Margaret Kenny (€229m) own the Clancourt group which has office developments on Harcourt Street off St Stephen’s Green in Dublin.

Sam Morrison (€229m) This Antrim developer (yes, it is an all-Ireland list) owns Corbo which in turn owns the Fairhill Shopping Centre in Ballymena and retail parks off Boucher Road in Belfast

Kevin and Michael Lagan (€176m) Antrim developers who have recently been engaged to develop the Dundonald site into which NAMA is pouring €11m.

Gerard O’Hare (€176m),  another Nordie, owns Newry’s Quays shopping complex, Fairgreen shopping centre in Carlow. Bertie Ahern was on the board of his company, Parker Green International.

Bernadette and John Gallagher (€173m) behind Doyle hotels.

Ken Rohan (€141m) owns Airspace Investments with property in Ireland, UK and Barbados

Charles Gallagher (€129m) stake in Abbey homes and Matthew Homes in England

Aidan Brooks (€94m) retail properties in London, Paris and New York

Eileen Monahan (€92m) stake in Doyles hotels and Johnston Court shopping centre in Sligo

Michael and Lesley Herbert (€88m) Nordies who own a string of KFC franchises but also own properties in Northern Ireland and Scotland

Thomas and Tom McDonogh (€86m), father and son Galway own the Brackenwood investment company

Lord Rana (€85m), Nordie, own Andras House property and hotel group

John, Ciara and John Patrick Byrne (€83m) own Dublin property through a Cayman Islands trust

Owen O’Callaghan (€82m) Moyglen Holdings and Blackwater Property

Angela and Michael Cotter (€80m) Park Developments, was previously involved in the Greystones Harbour development, NAMAed

Frank Fahy (€80m) Shannon Homes

James Egan (€79m) Broomford Holdings, a London-based property operation

Mark and Kathleen Kavanagh (€71m) Hardwicke group, parent of Kopian Investments.

Edward Lonergan (€71m) Nordie controls the Deramore group

John Miskelly (€71m) Belfast’s Ten Square Hotel

Noel and Miriam O’Callaghan (€64m) own hotels in Dublin, Gibraltar and Maryland, USA. Property in Kildare and Tipperary

Robert Harris (€56m) 20 companies in UK and New Zealand

Damian Heron (€56m) Derry-based builder and developer

Michael Holland (€56m) owns Fitzwilliam Hotel in Dublin

Patrick O’Leary (€56m) British Virgin Islands-based Arpal Investments

Ciaran Murdock (€53m) Newry-based Murdock group

Billy Hastings (€47m) Hastings Hotels chain including Belfast’s Europa and half of Dublin’s Merrion Hotel

Joseph Layden (€45m) Layden Properties Georges Street

Kevin and Mary Flannery (€41m) Flannery’s and the Imperial hotels in Galway and Foxfield Inns

Gerry Houlihan (€41m) owns half of Tifco which has several Crowne Plaza in Dublin, and Clontarf Castle

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BankZachodniWBK

One of the remarkable unappreciated facts about Ireland since the banking crisis, is the vast sell-off of public assets, sell-offs for the most part overlooked and unreported. NAMA is disposing of an average of €500-750m of assets a month every single month and state-owned banks, IBRC, AIB/EBS and to an extent Bank of Ireland are also disposing of billions per year. How many of you heard about the sale by AIB of €400m of Spanish loans in February 2013?

But you can bet there will be heated debate about the sale of the new National Lottery licence, the retail part of Bord Gais, the harvesting rights at state forestry company Coillte and whatever part of the ESB the Government eventually decides to sell, even though these sell-offs have a relatively modest financial impact.

And because the sale of NAMA and bank assets largely goes unnoticed, there is little or no analysis of whether the deals are good for the State. And even when we do get some details, there is little examination of the transactions and finance minister Michael Noonan bats away questions by claiming commercial confidentiality. Take for example AIB into which we have, so far, shoveled €21bn of bail out funds. In 2010, it sold its 70% stake in the Polish bank, Bank Zachodni WBK for which it received €2.94bn. A few weeks ago, KBC and Banco Santander sold their 21.4% stake in the same bank for €1.2bn – that equates to 34% proportionately more than AIB received, or to put it another way, if AIB had sold at the KBC/Santander price then the sale price would have been €3.925bn, €985m than it in fact received.

Back in 2010, the Minister for Finance was the late Brian Lenihan, the Secretary General at the Department of Finance was Kevin Cardiff since-elevated to the European Court of Auditors, the group managing director at AIB was Colm Doherty, replaced in 2011 by present CEO David Duffy, our public interest directors were and are Dick Spring and Declan Collier. Did they oversee a rotten transaction at fire sale prices?

We are unlikely to find out. And when challenged last week about the transaction, all Minister Noonan could say was that it was “unfortunate” that AIB was required to sell the asset in 2010. Again, it is someone else’s fault.

I wonder what transactions are taking place now today that will be characterized as “unfortunate” in years to come, though given the lack of scrutiny and oversight today, we may be destined to remain ignorant, and perhaps it is better so.

This is the parliamentary question and response referred to above.

Deputy Pearse Doherty: To ask the Minister for Finance if he is concerned that following the recent sale by KBC and Banco Santander of their 21.4% share in the polish bank, Bank Zachodni WBK, for €1.2bn, that Allied Irish Banks in which he holds 99.8% of the shares, sold its 70% share in the same bank for €2.94bn in 2010.

Minister for Finance, Michael Noonan: As the Deputy will be aware the sale of Bank Zachodni WBK in 2010 reduced the capital injected by the State into AIB. It is unfortunate that the bank was required to sell the asset in 2010, however given the scale of losses incurred by AIB in recent years, the bank was required to generate capital in any way that it could in order to reduce the burden on the State.

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The ability of the Department of Finance to competently forecast revenues from the new so-called Local Property Tax, has been questioned on here before. And a letter sent by the Secretary General of the Department last week to the Oireachtas Committee of Public Accounts reinforces the wing-and-a-prayer approach in the Department.

Two of the key components to estimating the revenue from the new property tax are exemptions and deferrals. Certain properties won’t have to pay the tax, unfinished estates, local authority housing, homes affected by pyrite for example. And certain households whose income falls below a certain level can opt for a deferral of the tax, whereby it is accumulated until the household’s circumstances improve or the property can be sold.

The letter dated 15th April 2013 – available here – sets out the Department’s estimates. It believes that 14-16% of households will be entitled to claim deferrals because their income is below €15,000 for a single-person household or €25,000 for a family-household. There will be other deferrals also, for example, for buyers in 2013, but the Department is unable to estimate these.

In 2013, the Department hopes to get about €260m in property tax, and in 2014, double that as the tax will apply for a full 12 months.

Elsewhere in the letter, the following data is provided

Number of homes in State – 1.99m

Properties unsold by builders – 17k

Properties in unfinished estates – 5k

Pyrite-affected houses – 12k

Local authority housing* – 120k

Approved housing body housing* – 27k

Homes for which tax demands have been sent – 1.6m (we separately know from Minister Noonan replying to a parliamentary question that some 1.29 letters are being sent out, some recipients own more than one property)

*there is an exemption only if this housing is provided to those with “special needs”

There is no reconciliation between the 1.99m homes and the 1.6m which the Department believes will be subject to the tax. The 14-16% for deferrals would equate to about 300,000 homes but letters would still need to be sent out by the Revenue to these homes.

Furthermore, there are areas where the Department was unable to provide estimates such as properties vacated for medical reasons, diplomatic properties and estimates of properties that will be bought by a first time buyer in 2013. Significantly there is an admission that until people return their tax forms to the Revenue, the  State is unable to accurately predict exemptions and deferrals.

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It was stark yesterday morning to hear the Independent TD for Wicklow and east Carlow, Stephen Donnelly on radio call on insolvent Irish people to emigrate rather than submit to the new personal insolvency processes. Mind you, it is stark to compare and contrast the new Irish processes and those available in the UK, and it is no surprise at all that more than 20 NAMA developers have thus far filed for bankruptcy outside this jurisdiction. Indeed some like John Fleming, Ray Grehan, Danny Grehan and Michael Doran have already been discharged and are financially reborn after 12 months.

We normally learn of NAMA bankruptcies from journalist Gavin Daly at the Sunday Times but recently creditors have been liaising with the UK courts and the UK Insolvency Service and have been able to act in advance of bankruptcy hearings. We know that publican David Cullen against whom NAMA obtained a €29.1m judgment in March 2013, was set to have a bankruptcy hearing on 9th April, 2013 though he has not yet been recorded as bankrupt at the UK Insolvency Service.

We learned last week that another NAMA debtor John Fraher is seeking to be declared bankrupt in the UK. John has moved to the UK and now lives in Gerrard’s Cross, Buckinghamshire, England a district whose average house price is the most expensive homes in the UK.  John’s UK bankruptcy hearing is set to be heard on 17th May 2013, and if he is successful, he should be declared bankrupt soon thereafter. NAMA moved against John in January 2013 and the background to the case is here – in summary NAMA is seeking a €5.5m judgment against the Tipperary businessman who is defending the claim. Last week, the case came before the Commercial Court division of the High Court where the redoubtable Judge Kelly has fast-tracked the matter for an imminent hearing.

This is the list maintained on here of 23 NAMA bankruptcies outside Ireland. The above two would make 25 and that list may well be incomplete. How will this Government justify the still-draconian terms of the new insolvency regime when such large numbers are emigrating for (relatively) quickie bankruptcies?

BankruptciesApr2013

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