Judge schedules hearing in Sean Dunne bankruptcy to discuss “documents”

Seems not a day goes by in the Sean Dunne bankruptcy affair without some new development. Today, Sean’s award-winning bankruptcy lawyer has succeeded in getting a hearing scheduled for 21st May 2013 to discuss the following “Motion to Extend Deadline to File Schedules or Provide Required Information Filed by James Berman on behalf of Sean Dunne, Debtor. (Attachments: # 1 Proposed Order) (Berman, James)”

This doesn’t make a lot of sense. Sean obtained a second extension to file his financial information and that expires tomorrow 2nd May 2013. So it seems that we mightn’t get the statement of affairs tomorrow as expected. Also there is no attached proposed order in today’s filings.

But the judge has scheduled a hearing for 21st May 2013.

There was supposed to be a creditors hearing on [CORRECTED] 8th May 2013, so the status of that is uncertain now also, as the creditors will need to have sight of Sean’s statement of affairs.

The filing today is available here.

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Are you a potential buyer of NAMA loans? NAMA not returning your calls? Then read this.

From time to time, this blog receives confidential complaints about NAMA’s lack of responsiveness in dealing with offers for its properties. Trouble is, NAMA doesn’t control* any real estate property. The real estate property is controlled by either the developer or the receiver that NAMA has had appointed to it. So, it’s no real use contacting NAMA in most instances. If you spot a property on the NAMA foreclosure list, then contact the receiver or the estate agent. If you see a property that you think is “in NAMA” and it’s not on the foreclosure list, contact the developer.

But when it comes to loans, it’s different. Most of you won’t be interested in buying other people’s loans but there is a huge business out there, as reported here before. And occasionally we hear about buyers of loans complaining of not being acknowledged or responded to by NAMA. In the case of loan sales, it is NAMA and only NAMA that controls the loans.

So what do you do if you’re not getting a response?

This week in the Dail, the Sinn Fein finance spokesperson Pearse Doherty asked the Minister for Finance what potential buyers of loans should do if they don’t get a response from NAMA. It isn’t 100% clear what the response is, because the Minister seems to be inviting Deputy Doherty to lobby NAMA on a private transaction, which doesn’t seem right. Alternately, the Minister means that potential buyers of loans should contact the Head of Asset Management at NAMA, John Mulcahy , directly.

And NAMA has sold €2.5bn of loans by reference to par value so far.

The parliamentary question and response are here:

Deputy Pearse Doherty: To ask the Minister for Finance if he will outline the procedure used by the National Asset Management Agency when approached by a potential buyer of loans controlled by the Agency, and specifically the way it deals with a specific multi-million euro offer for loans; if NAMA has time targets for acknowledging or responding to such approaches; and if there is no acknowledgement or response, if potential buyers have alternative routes to convey offers to NAMA.

Minister for Finance, Michael Noonan: I am advised by NAMA that approaches by third parties in relation to possible loan sales are dealt with expeditiously by reference to the complexity of the offer received and the debtor connection and loan portfolio in question.  In assessing any loan purchase offer, NAMA’s key criterion is whether the proposed transaction makes financial sense for the taxpayer. If so, and if NAMA believes that those making the offer have the financial capacity to deliver on it, NAMA then appoints loan sales brokers to market the loans and to deal with offers from the original bidder and other interested parties.  The timing of a sales transaction will be geared towards ensuring that the Agency maximises the value of the loans and therefore the return to the taxpayer. I am advised that NAMA has, to date, sold loans with par balances of €2.5 billion and that parties interested in making serious and realistic bids for loan portfolios are welcome to submit offers to it. If the Deputy is aware of any serious and realistic loan purchase bid made by a credible investor which has been submitted to NAMA but not evaluated by the Agency, I would suggest that he brings it to the attention of the Head of Asset Recovery, NAMA.

* NAMA actually controls itself directly €7m of property which it has acquired as a result of personal guarantees. This includes art and real estate property.

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Neil Adair: clarification and apology

In a blogpost on here on Tuesday, it was stated that Neil Adair, along with another founder of PBN  Property, Patrick Kearney were part of the so-called Maple 10 or Anglo Golden Circle. This is untrue and was corrected on Tuesday shortly after the blogpost was published. In fact, only Patrick Kearney was a member of the Maple 10 as reported by Simon Carswell in the Irish Times in 2011. The blog apologises to Neil and regrets the error.

With respect to Neil’s tenure at Anglo Irish Bank in Northern Ireland, it was stated on here “Neil Adair is the former boss of Anglo in Northern Ireland”. This statement is based on several sources.

The Sunday Business Post referred to Neil in the title of an article – not available online without subscription –  “Former Anglo boss’s company owes €370m”.

The Belfast Telegraph has referred to Neil as “a former head of Anglo Irish Bank in Northern Ireland”.

The BBC has referred to Neil as “the former manager of Anglo’s operation in Northern Ireland”.

The BBC has previously reported “It was 1995 when Anglo Irish, which was founded in the Irish Republic in 1964, first took an interest in Northern Ireland. In 2004, Business Eye magazine reported how its chief executive Sean Fitzpatrick, a name now synonymous with Anglo’s collapse, was in Belfast at a business dinner when he bumped into Neil Adair, a fellow chartered accountant. The pair became friendly and not long afterwards, Mr Adair was asked to set up Anglo’s first operation in the northern part of the island. Its apparent success was swift and stratospheric. By 2006, the Belfast outlet held a loan book of almost 1.5bn euros. Its costs base was also running at a fraction of standard industry levels. There were boasts in the press about how it did business much more quickly than its rivals, with bureaucracy at a minimum.” Neil left Anglo in 2005 when he co-founded PBN with Patrick Kearney and Brian McConville.

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An Taoiseach makes a quantum leap in explaining his Davos doings about Burma and telecoms

” A quantum leap will be involved in going from no communications to all the modern methods of communication” An Taoiseach Enda Kenny on 30th April 2013 in the Dail responding to questions about his previous statement that he had discussed communications investment in Burma, whilst attending the Davos gathering in January

“It could be a quantum leap – Myanmar could jump 50 years all in one move” Digicel chairman, Denis O’Brien in September 2012

If you were around in the early 1980s, you’ll know we didn’t have iPads but made do with the zany inventions of Briton Clive Sinclair. In 1984, he unveiled his Sinclair QL computer  which was the latest development after his ZX-80, ZX-81 and Spectrum. The “QL” stood for Quantum Leap, and because the press liked to take the mickey out of Clive and his many – mostly disastrous, at least financially – inventions, they pointed out that a quantum leap was, in chemistry, one of the smallest movements physically possible. The Sinclair QL was Clive’s last foray into computers, and to this day, whenever someone mentions “quantum leap” I think of what a tiny movement it is.

Both An Taoiseach, Enda Kenny and Digicel chairman Denis O’Brien seem to believe Burma or Myanmar is set for a “quantum leap” in communications. But what we’ve wanted to know for two months is whether they have more in common, and specifically if An Taoiseach had any dealings with Denis or his company at the Davos gathering in January 2013.

On 12th February 2013 An Taoiseach gave the Dail a summary of his visit to Davos and mentioned two matters and two matters only – communication investment in Burma and Bill Gates’s crusade against polio.

Since then, the Opposition has been trying to find out who he discussed communications investment in Myanmar with, and specifically if it was with Denis O’Brien, the man against whom the Moriarty Tribunal made adverse findings which An Taoiseach accepts in their entirety but which Denis rejects. It might be politically fatal to An Taoiseach to, on one hand embrace a Tribunal’s findings which painted Denis in a very dim light – findings rejected by Denis – and on the other hand, be somehow supporting Denis’s overseas business.

There have been all sorts of parliamentary questions and even a Freedom of Information request since February but yesterday, An Taoiseach was cornered in questions to An Taoiseach and faced questioning from Sinn Fein and Fianna Fail, extracted below. In summary, An Taoiseach denies “meeting or connection with Digicel in Davos” and says he “had a visit from a [unspecified] company  interested in Irish potential in the area” and he “discussed the matter briefly with a member of one of the international telecommunications companies”. He later appeared to confirm that “international telecommunications” company as Ericsson.

It might seem a flimsy basis to form 50% of An Taoiseach’s summary of his doings in Davos, but he has answered the question. And it is on the record.

Deputy Micheal Martin: The Taoiseach let it slip in the Dáil the last time this issue arose that he had been taking an active interest in the Burmese mobile telecommunications situation during the Davos forum. He did not have time to follow up on that matter in the House, but will he explain why he was having discussions on this issue? Were they entirely coincidental or was he particularly interested in the Burmese situation?

The Taoiseach: In respect of telecommunications and Myanmar, I had a visit from a company interested in Irish potential in the area. I had an engagement with it about the possibilities it sees for Irish involvement in trading with a country that has enormous resources and has distinct possibilities for a trading nation such as this country. I have never been there. I discussed the matter briefly with a member of one of the international telecommunications companies in Davos, who attended the IDA-sponsored function where there were 40 chief executives of international companies. In Myanmar, less than 2 million people have had access to mobile communications out of a population of 60 million. A quantum leap will be involved in going from no communications to all the modern methods of communication. In many ways it will be a social experiment for a people who have had centuries of limited capacity to connect around the world.

Deputy Mary Lou McDonald: The previous time the Taoiseach referred to discussions in Davos with people about the opening up of telecommunications was in the context of the G8 summit. I remind him that he said:

“When speaking to people in Davos, the issue of the opening up of Myanmar, the former Burma, arose. It is a country of which we do not have great knowledge, although there were real connections between Ireland and Burma as it was called. That country of 60 million has a huge range of natural resources, yet some 58 million of its people have never had access to communications. That country will move from what might be termed ground zero to cloud computing and cloud access straight away. The scale of the investment there will be enormous.”

That is what the Taoiseach said on 12 February. He clearly recognised a big investment opportunity in that regard. Will he elaborate a little more on whom he discussed those matters with in Davos? He said it was a member of an international company. Does he recall who it was or who they were? I ask that because I understand that Digicel, the company controlled by Denis O’Brien, is pursuing one of the two telephone licences currently on offer in Myanmar. Did that form part of the discussion?

The Taoiseach: In response to another of the Deputy’s questions, I had no meeting or connection with Digicel in Davos. The chief executive that I spoke to was from a different company, from a northern European country with very significant international and Irish interests in telecommunications. Our discussion arose at the IDA-sponsored investment and continued investment in Ireland event. The company in question is Ericsson.

Deputy Mary Lou McDonald: What was the name of the company?

The Taoiseach:   Ericsson.

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The NAMA injunction, the confidential information and the Data Protection Commissioner

To summarise events since Monday: a statement was produced by Tipperary businessman John Fraher in the High Court in Dublin on Monday in a case where NAMA successfully obtained a €5.9m judgment.

On Monday evening, John Fraher’s statement was obtained on here. The statement included an annex which apparently listed confidential loans information disclosed by NAMA. NAMA was asked to comment on the affidavit and a blogpost was published here on Monday night which attached part of the statement, “the affidavit” but didn’t attach the annex with the confidential loan information – it was stated on here that the annex was being withheld for the time being whilst privacy considerations were examined.

On Tuesday evening, NAMA’s solicitors wrote to NWL threatening to seek an injunction unless an undertaking was given not to publish the annex. That undertaking was given.

What is the brouhaha about?

This summary might help:

What: 103 lines of information showing the names of individuals, companies, businesses, the par value of their loans, the NAMA acquisition price for those loans

When: it is not 100% clear but likely to have been provided in 2011 or 2012

Who: it is alleged that NAMA employee, Padraig Reidy sent the list to John Fraher and his financial advisers.

Why is it important: two reasons (1) because it lists loans owed by John Fraher to NAMA with both the par value of the loan and also the price apparently paid by NAMA for the loan and the NAMA price is supposed to be confidential and not disclosed outside NAMA to anyone including the borrower because it gives potential buyers of the loan or underlying property an advantage to know what NAMA paid, as NAMA has said that in general it seeks to obtain what it paid for the loan, and

(2) it lists loans owed by people unconnected to John Fraher. To illustrate this with a completely hypothetical example. (a) John borrowed in his own name €10m to buy an office block. (b) Separately, he jointly borrowed €30m with Sean to buy a plot of land to develop housing (c) Completely unconnected to John, Sean jointly borrowed €50m with Mary to  buy a shopping centre. While John would be entitled to see his own loan information (a) and the loans for which he was jointly liable (b), he has no right to see loans completely unconnected to him (c).

The complaint below has been submitted to the Data Protection Commissioner today together with a copy of the affidavit which you have all seen and is here, and with a copy of the annex which contains the confidential information which will not be published on here because in general it won’t usefully add to your knowledge, because it contains personal financial information and because a commitment has been given to NAMA not to publish it.

“Mr Billy Hawkes
Data Protection Commissioner
Canal House
Station Road
Portarlington
Co. Laois

(by email to info@dataprotection.ie)

Dear Mr Hawkes,

I am involved in the operation of the NAMA wine lake blog which reports on the activities of NAMA and related subjects.

https://namawinelake.wordpress.com

I am writing to draw your attention to appears to be a breach of the Data Protection Act 1988 by NAMA, to ask that you investigate this specific incidence and to ask that you generally investigate if this incidence has been replicated or is systemic.

Background
On Monday last, 29th April 2013, the blog was made aware of an affidavit in a High Court case – reference 2013/213 S, National Asset Loan Management Limited, represented by Hayes solicitors versus Mr John Fraher. The affidavit was produced by the respondent, Mr John Fraher and it included in a separate document annexed to the affidavit, copies of correspondence and in addition, what I will refer to as the “Subject Information”, namely the names of NAMA borrowers, the amounts owed and the valuation placed on those loans by NAMA. The affidavit had been read into the court record on Monday at the High Court where NAMA succeeded in obtaining a circa €6m judgment against Mr Fraher. On Monday evening, I sought comment from NAMA on the affidavit and the Subject Information. There was no response and a blogpost was published on Monday evening and is available here.

https://namawinelake.wordpress.com/2013/04/29/nama-provided-reams-of-confidential-financial-information-to-third-parties-affidavit/

The blogpost attached the affidavit but the Subject Information was withheld as it seemed to touch on issues of privacy.

The alleged breach
Mr Fraher alleges in his affidavit that a NAMA employee, Mr Padraig Reidy, provided Mr Fraher’s financial advisers with the Subject Information. Mr Fraher alleges that NAMA subsequently sought to have this information destroyed. The Subject Information provided to Mr Fraher and his financial advisers apparently showed on 103 lines, the names of borrowers, the amount of the loan and the amount paid by NAMA for the loan. Mr Fraher claims that some of the borrowers have no connection to him, and that some loans also have no connection to him. NAMA has a duty to its borrowers to protect the confidentiality of their affairs, and on the face of it, NAMA has provided in this instance, financial details of people, companies and businesses to a third party.

The complaint
That NAMA, contrary to the Data Protection Act (as amended) apparently disclosed to third parties confidential financial information relating to its borrowers in the specific incidence when Mr Padraig Reidy of NAMA provided Mr John Fraher’s financial advisers with a listing of 103 loans with the names of borrowers and the value of the loans, with some of the borrowers unconnected to Mr Fraher.

NAMA appears to systematically regard an individual as part of what it calls a “connection” and in this instance, NAMA apparently disclosed confidential personal information to a third party – Mr Fraher – because the third party was connected with some, though not all, of the borrowers listed.

The general complaint is that NAMA may have systematically provided connection information to other borrowers in previous incidences, but I do not have information on that at this point.

Attachments
I am attaching two documents (1) the affidavit and (2) the annexed document which contains the Subject Information.

I should say that solicitors acting on behalf of NAMA have contacted me seeking an undertaking that the Subject Information not be published on the NAMA wine lake blog. This undertaking was promptly provided and further, an undertaking was volunteered not to disseminate the Subject Information in any manner whatsoever, save in its inclusion in this complaint to you.

I look forward to hearing from you with an acknowledgement of this correspondence and an outline of how you will deal with it,

With many thanks for your time,

Yours sincerely,

Jag Singh

https://namawinelake.wordpress.com” [ENDS]

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NAMA sues two more people in Dublin’s High Court

In its management accounts published last week, NAMA said that it spent €4,633,000 on legal fees in 2012. This is misleading because it just represents the legal fees charged to NAMA’s profit and loss account. In addition, as we learned a fortnight ago, NAMA has incurred €22m of legal fees in 2012, with most charged to its balance sheet in optimistic anticipation of recouping these fees from developers.

Yesterday, in Dublin’s High Court, NAMA launched two new cases with details from the Court Service as follows:

(1) Case reference, 2013/1367 S, National Asset Loan Management Limited, represented by Beauchamps solicitors is suing an individual named “Thomas Tougher” and as is usual with recently-filed applications, there is no solicitor-on-record for the respondent

(2) Case reference, 2013/1381 S, National Asset Loan Management Limited, represented by Gartlan Furey is suing an individual named “Gemma Stack” and, as is usual with recently-filed applications, there is no solicitor-on-record for the respondent.

As this is Ireland, we don’t know the cause or remedy, nor do we know the respondent. There is a Thomas Tougher at the helm of Tougher Oil whose loans NAMA foreclosed on, and there are reports that Tougher Oil’s assets are being sold to Cork-based haulage company, Masterlink. It should be stressed we don’t know if this is the “Thomas Tougher” being sued by NAMA.

We know that in the past, NAMA has sued an individual ”Gemma Stack” and that the Court Service subsequently changed the respondent to “STACK IN HER CAPAC AS LPR KEVIN FITZSIMONS DECSD GEMMA “which probably means the respondent is Gemma Stack in her capacity as legal personal representative of Kevin Fitzsimons who had died. NAMA has launched further cases against “Gemma Stack” and the tally is currently five.

NAMA has launched 18 actions in Dublin’s High Court this year and has been on the receiving end of 15.

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NAMA forecloses on more Kennedy Group properties

Three weeks ago, NAMA started moving against a Northern Ireland property developer, the Kennedy Group, with administrators appointed to a range of assets including the Ramada Portrush Hotel. There was an unusual reaction that we aren’t used to on this side of the Border with three DUP politicians, Gregory Campbell, Ian Paisley junior and finance minister Sammy Wilson expressing concern about the foreclosures.

This morning, the BBC reports that seven additional properties have placed in receivership at the behest of NAMA. The companies in the group affect and properties are listed below:

ACI Developments Limited – “four parcels of land close to the Junction One centre in Antrim”

Waterside Crescent Limited – “two retail warehouses on Strand Road in Derry”

Kennedy Investments Limited – “adjoining sites on The Crescent in Portstewart which have planning permission to build 24 apartments”

When the foreclosures took place earlier this month, the political outcry seemed to be placated with a prompt NAMA announcement of a €11m investment in a DUP-stronghold in the south-east of Belfast.

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UK residential property prices increase 0.6% in the month of April 2013

The Nationwide Building Society has this morning published its UK House Price data for  April 2013. 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 165,586 (compared to GBP 164,630 in March 2013 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 valued the Current Market Values of assets underpinning NAMA loans).

UK prices are up 0.8% over the past 12 months and are now 11.0% off the peak of GBP £186,044 in October 2007. Interestingly the average house price at the end of April 2013 being GBP £165,586 (or €195,491 at GBP 1 = EUR 1.1806) is 27% above the €154,232 implied by applying the CSO March 2013 index to the PTSB/ESRI peak prices in Ireland.

It should be said that in the UK, the Nationwide Building Society adjusts the actual prices for seasonal factors and reports that prices were “little changed” in 2013 with a seasonally adjusted 0.1% decline. The view on here is that seasonality is irrelevant in the market but views differ.

With the latest release from Nationwide, UK house prices have increased 1.7% 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 777.1 (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 28.7% for NAMA to breakeven on a gross basis.

According to the Nationwide this morning, the outlook for 2013 is uncertain but recent developments in the provision of credit for first time buyers and other initiatives may lift activity slightly,

“The outlook for the housing market is unusually uncertain at present, in part because the prospects for the wider economy are unclear, but also as the impact of a number of policy initiatives is hard to gauge”

On 20th March 2013, the UK’s independent Office for Budget Responsibility published its latest fiscal outlook which forecasts GDP for 2013-2017 at 0.6%, 1.8%, 2.3%, 2.7% and 2.8% (but as with all economic forecasts in the long term, all forecasters forecast a peachy outlook!). Deficit:GDP is forecast for 2013-2017 as 6.8%, 6.0%, 5.2%, 3.5% and 2.3%. Debt:GDP is forecast in 2013-2017 at 94.9%, 98.6%, 100.8%, 100.8% and 99.4%. Inflation is forecast for 2013-2017 at 2.8%, 2.4%, 2.1%, 2.0% and 2.0%. It expects residential prices to increase 0.9%, 1.9%. 3.6%, 4.0% and 4.0% in 2013-2017 and commercial property to change -0.1%, 2.6%, 3.6%, 3.8% and 3.4%.

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