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Archive for the ‘Banks’ Category

PTSBLogo

Minister for Finance Michael Noonan refuses to tell us the book value of IBRC’s loans at the end of 2012 and he also refuses to tell us if any borrowers have yet refinanced their loans out of IBRC since that “bank” was placed in special liquidation on 6th February 2013. We DO know that the independent valuation of IBRC’s loanbook by PwC and UBS should be completed shortly and that loans with par values of over €10m will be offered to the market, and if the highest bid is in excess of the independent valuation, then the loan is sold and if not, it will go to NAMA. The transfer to NAMA was to have taken place in August 2013, but that date is likely to slip and may even be the start of 2014. In June 2012, IBRC had loans with a written-down book value of €16bn, so NAMA will be taking over up to €16bn of loans; that may have a significant impact on NAMA which itself had €22bn of book value loans at the end of 2012.

But NAMA might shortly be receiving a wodge of loans from another source: Permanent TSB.

Permanent TSB has created an internal business unit called the “Asset Management Unit” into which €14bn* of nominal value loans have been shoveled. “Nominal value” means par value, for example if PTSB loaned John €100,000 for his house and he currently owes €90,000 then the nominal value or par value is €90,000. John might have fallen into arrears and his house might be worth only €60,000 so PTSB might have made a provision of, say €20,000 as an estimate of the value which it won’t recover on the loan. So the written-down or book value of the loan might only be €70,000 – the par value of €90,000 less the provision for a loss of €20,000. We don’t know the written-down or book values of the €14bn of nominal value loans in PTSB’s AMU.

PTSBLendingDec12

At the end of 2012, PTSB had an overall total of €35bn of nominal value loans – see extract from the notes to the accounts above – so the AMU represents just under half of the PTSB loanbook. It is understood to mostly comprise commercial property loans (€2.2bn in total in PTSB, most of that is probably in the AMU) and loss-making tracker mortgages. We don’t know the impairment provision attaching to the AMU loans but the overall total provision in PTSB at the end of 2012 was only €3bn so the book value of the AMU will be €11bn-plus.

PTSB wants rid of its AMU because the uncertainty of what lies within, is dragging down the rest of the operation and preventing the bank from getting back on its own two feet. However, if the AMU is transferred to NAMA, then NAMA will only pay the current market value of the loans, and PTSB is likely to see a colossal additional loss, probably in the billions. NAMA will also end up managing problem mortgages, which is not what was originally envisaged for the agency.

We are likely to soon hear what is to happen to PTSB’s AMU.

*The €14bn was confirmed in a PQ this week here.

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Secret of the Week

ThatsAnotherFineSecretMess

You might recall the commitment given by This Lot when they came to power to make public administration more transparent? Here is a selection – from the past seven days alone – of matters involving your money that This Lot weren’t referring to when they promised more transparency:

The Black Book which is the Central Bank’s disaster planning manual, first published in 2001, it was updated in 2007 after the run on Northern Rock in the UK. Minister Noonan said “The question of releasing the document is therefore a matter for the Central Bank of Ireland in the first instance. The document was shared with the Department of Finance on the understanding it would be treated in strictest confidence given the nature of the matters treated in the document. I do not therefore propose to provide a copy of the document”

The Collateral Posting Agreement which forces NAMA to hand over €1.15bn of cash to the NTMA as security against derivative contracts. Minister Noonan said it “contains commercially sensitive information and is therefore not suitable for publication”

NAMA & NABCO: The terms under which NAMA is providing social housing – which we have paid for through funding NAMA – to NABCO. Minister Noonan said “I am advised by NAMA that the particulars of the lease agreement, including term length and rental fee, have been negotiated in confidence with NABCO as a commercial counterparty and it would not be appropriate for the Agency to publish such details as it could prejudice the conduct or outcome of NAMA’s negotiations with other commercial counterparties”

AIB debt forgiveness: The debt forgiveness given to two large Irish media groups, Thomas Crosbie Holdings and Independent News and Media by state-owed AIB and 15% state-owned Bank of Ireland. Minister Noonan said due to “data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances”

Index of the Week

KBCESRI

Yesterday, the consumer sentiment index jointly produced by KBC bank and the ESRI was published. This has to be one of the most volatile monthly indices you’ll ever see – you’ll see its history as far back as 1996, here; its peak was reached in 2000 at 130-odd, and throughout the downturn since 2007, it has been all over the place. It stands at 58.9 in April 2013, down from 60.0 in March but it was as low as 49.8 in December 2012 and 70.0 in August 2012.

Quote of the Week

“As I explained to the cardinal and members of the church, my book is the Constitution and the Constitution is determined by the people. That’s the people’s book and we live in a republic and I have a duty and responsibility, as head of government, to legislate in respect of what the people’s wishes are. Those wishes have been determined and set out by the Supreme Court, which determines what the Constitution actually means” An Taoiseach Enda Kenny responding to further rumblings in the Catholic hierarchy which has set itself in fierce opposition to proposals to introduce legislation clarifying the position on abortion

“Catholics understand therefore, that a vote for Sinn Fein is a vote for the weakening of the institution of marriage and the right to life for all the unborn” Fermanagh priest and columnist, Fr Owen Gorman writing in the monthly Catholic “Alive” magazine. Aghadrumsee priest Father Owen Gorman was writing in his column in the April 2013 issue of the magazine and suggesting that Catholics have started to support the traditionally-Protestant DUP, on religious grounds.

Yes, the abortion debate still hogs the headlines, and this was the week we found out that anyone involved in procuring or effecting an abortion was automatically excommunicated from the Catholic Church under Canon law 1398. Actually, we didn’t find this out at all because the old media couldn’t be bothered to develop the excommunication threat – that was mooted (and then dismissed) – to legislators who would vote in favour of the new Protection of Life during Pregnancy Bill.

Elsewhere, in this week’s noteworthy quotables:

“The traditional barriers of authority and hierarchy are lowered and you need to be able to manage accordingly” Guide issued by Fine Gael to its TDs and senators, helping them deal with the challenges of new media

Scourge of the Week

“When asked what the primary factors would be to motivate them to emigrate, the vast majority of respondents stated that they would emigrate primarily because of a lack of employment opportunities at home or in the expectation that they would have better job prospects abroad” Time to Go? emigration study by National Youth Council

This week, the National Youth Council of Ireland launched what it called a qualitative study of Irish emigrants, focusing on the young up to age 30. The 100-page report is worth a read, it is highly anecdotal in providing original source comments from actual immigrants, but at its launch on Thursday, the NYCI made clear that although there may be pull factors which make emigration attractive, the “determining factor” was lack of employment opportunities here at home. So, emigration may indeed be what finance minister Michael Noonan calls a “lifestyle choice” but this study shows that the “lifestyle choice” hinges on employment, and in a State where there are 430,000 on the Live Register and 295,000 unemployed equating to a standardized unemployment rate of 14.0%, there is really no free choice at all.

Goal-hanging politician of the Week

WhosANaughtyBoyThen

“You never once contacted our school, Griffeen Valley, in relation to our forthcoming school extension..neither did anybody from our board of management or staff contact you or seek your assistance in relation to the extension. You had absolutely nothing to do with this development, and yet you distribute a leaflet in the Lucan area claiming to have ‘initiated, led and delivered’ this extension..This is nothing but gross cynical opportunism on your behalf, which I find objectionable and depressing” Principal of the Grifeen Valley Educate Together national school, Tomas O’Dulaing speaking to the “Lucan Gazettes” 1st May 2013

Dublin Mid West Fine Gael back bench TD, Derek Keating came in for some criticism from a school principal in Lucan who resented credit being claimed on a political leaflet by Deputy Keating, for an extension to the school. The criticism made front page news of the “Lucan Gazettes” newspaper, which is in fact what they call a “free sheet”, in that it is free to readers and it is advertisers that fund it. Perhaps to spare his boss’s blushes, Deputy Keating’s assistant, Tommy Morris, was caught on camera – pictured here – removing copies of the newspaper from local outlets. It is now reported that some 3,000 copies were taken and the matter has been reported to the Gardai.

On their website, “Lucan Gazettes” which is part of the Dublin Gazettes group say they have 169,000 readers a week. Would that be a week when Tommy Morris isn’t active?

ReadersLG

Job interview of the Week

BillHerlihy

Okay, this interview took place on 23rd April 2013, when 74-year old sports commentator and noted Fine Gael supporter, Bill Herlihy was “grilled” by the Oireachtas Joint Committee on Environment, Culture and the Gaeltacht about what he could bring to the role he recently won as chairman of the Irish Film Board. You will find the full transcript of the hearing here from page 19 but it will depress you; the hearing commenced with Bill read out an impressive pre-prepared statement. A Laois-Offaly FG TD asked what the IFB was going to do for Laois-Offaly, ditto for a Laois-Offaly FF TD, a Roscommon Independent TD asked about the decline in cinemas to the point there is only one cinema in county Roscommon, an Independent senator and a Labour TD promoted their own artistic endeavours and who knows, might be asking the IFB for a handout imminently and SF didn’t even ask a single question. After what appears to have been about five minutes of exchanges, the FG deputy chair of the committee concluded by saying “That concludes our consideration of the topic and I thank Mr. O’Herlihy for coming before us and giving us the benefit of his wisdom. I propose we notify the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, that we have completed our discussion with the chairperson designate of the Irish Film Board, Mr. Bill O’Herlihy. Is this agreed? Agreed.I will conclude with the words of a well known-television sports commentator, “Okey do-key””

Dontcha just love this country.

Poem of the Week

Crack

70,000.
Gone.
In a week.
Crack.
Actually.
A crack.
Was selling the gaffe.
Not quite breaking even.
A big improvement.
On borrowing to bail.
Then last week.
A bidding war.
It’s war. Baby.
Suddenly up 70.000.
All dandy.
Hands in air.
Wheeeeeee
Capitalist roller-coaster.
Enter the
ir  surveyor.
A crack.
Crack fluency required.
Enter my surveyor.
We’re looking at 10,000.
Fine.
But crack ‘s now a sobering force,
Sobering.
The purveyor of madness and rage?
So into equity’s duplicity.
Rode my 70,000
Plus 800.
The cost of.
My lesson in crack.

With Nobel laureate Seamus Heaney lying doggo during these historical times, it has fallen to others to chronicle economic challenges through poetry. We’ve had contributions on here before from sf ca writer. This week, the PoliticalWorld blog has launched its first foray into traditional publishing when it published a real-paper-book anthology of poems by Kevin Barrington entitled “I love the Internet” available for download here. Poems deal with the usual agonies of the human spirit but set against the unusual reality of current economic times such as the boom in property prices and then negative equity in the above piece “Crack”. Richly illustrated, worth a look.

Auctioneer marketing tip of the Week

Whatever about prices, there appears to be some consensus amongst estate agents that the commercial property market is humming with a reasonable flow of transactions at present, though residential property transactions have fallen off after the rush to meet the deadline of 31st December last when mortgage relief for first time buyers was curtailed. Corporate advertising by Irish estate agents and property companies seems to have intensified, but can any of them compete with the above Californian estate agent who has adopted a novel approach to self promotion.

What next? Maybe Messrs Hollis, FitzGerald, Nugent, Moran, Potterton, Meagher, O’Reilly and Hillyer might produce a barbershop chorus.

Baby pipeline of the Week

InterCountryAdoptions

We found out this week the countries from which we are adopting children. In 2012, a total of 117 children were adopted from overseas. Russia has replaced Vietnam at the top spot of source countries for children adopted into Ireland, though that position was placed in jeopardy earlier this year when the Oireachtas joint committee on Foreign Affairs and Trade threatened to create a so-called “Magnitsky List” for Russia which would impose sanctions on those people suspected of being involved in the death of Moscow lawyer and accountant, Sergei Magnitsky who died in prison after his arrest when he was investigating state-level tax fraud. The Russians responded with their ambassador to Ireland threatening to close down the Russian baby pipelines if Ireland pressed ahead with sanctions. Just over a week ago, our fearless committee backed down and merely called for an investigation into the horrible death of Sergei. Elsewhere on the list, Ethiopia is number two, but you had better get in quick there before Madonna snaps them all up. On a serious note, adoption in Ireland is just so difficult that only 200 Irish children are adopted a year despite some 6,000 being in care. Last year’s Childrens Referendum may herald an increase by removing obstacles to adopting children of married couples, but for the time being, the foreign baby pipeline just serves to highlight our domestic failure to facilitate adoption.

Graphic of the Week

DontGoChasingWaterfalls

This was the week when the Central Bank of Ireland’s Fiona Muldoon – front-runner to take over Matthew Elderfield’s role following his resignation – unveiled what is a described as a “Pilot Scheme for Consumer Multi-Debt Restructuring”. It seems like a solo-run by the Central Bank, uncoordinated with the new personal insolvency schemes that are supposed to be available from the end of June 2013. And to cynics, it appears like a last-ditch attempt to minimize mortgage impairment losses at the Irish banks to the greatest possible extent. The Central Bank scheme envisages there being an independent “service provider” to manage whatever agreement is sought or entered into by borrowers, and feathers were ruffled when it was suggested the Central Bank might seek to engage a UK company, rather than one of the burgeoning bodies in Ireland providing debt management services.

A feature of the pilot brochure was a decision waterfall which illustrated how the indebted might deal with their debts. Lengthening terms and lowering interest rates are explored to the greatest degree feasible before there is any hint of a debt write-down.

 Book of the Week

BookOfTheWeek

Quite a number of people have asked when we should finally find out the names and dealings of the 60-70 people whose offshore account details were recently leaked, as part of the International Consortium of Investigative Journalists investigation. The 60-70 Irish had companies created in the British Virgin Islands, a jurisdiction which hides company control and dealings from prying eyes. In the UK, the BBC and the Guardian newspaper apparently received the master-file of the leaked details, and the BBC is nudged every so often to see when it will make available the Irish details.

Meanwhile the ICIJ has published an e-book (it’s free!) which brings together reports from various countries showing the impact of the leaked details. It is a fascinating read and although there’s practically no Irish revelation, the compendium of reports show how people have hidden their wealth and dealings, have suddenly become unstuck.

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“The Black Book was the CB crisis management manual including guidance on subjects such as emergency liquidity assistance, legal requirements and more logistical issues.” Nyberg report on the banking crisis published March 2011

This sounds like something out of the Evil Dead, but it seems that the Central Bank of Ireland has a ”Crisis Management Manual” also known as “The Black Book” which is a “set of processes and procedures to assist it in the management of a financial crisis situation”. It was drafted in 2001 and updated in August 2007. Given that it was in existence before the Night of the Bank Guarantee in September 2008, before the nationalization of Anglo Irish Bank in January 2009 and the creation of NAMA in December 2009, you would think that we had a right to see this Black Book. Let’s not forget that this state has borne the €71bn gross cost of bailing out the banks – that’s the famous €64bn plus €1bn shoveled in, in March 2013 to pay IBRC bonds plus €6bn of state-aid given to the banks by NAMA.

In the Dail this week, the Independent TD for Wicklow and east Carlow, Stephen Donnelly asked Minister for Finance Michael Noonan to provide a copy of the Black Book, and…… yes, you’ve guessed it, it’s confidential. In fact Minister Noonan went further this time and said “The document was shared with the Department of Finance on the understanding it would be treated in strictest confidence given the nature of the matters treated in the document. I do not therefore propose to provide a copy of the document.”

It can’t have been a great read.

The parliamentary question and response are here:

Deputy Stephen Donnelly: To ask the Minister for Finance if he will provide a copy of the Crisis Management Manual, also known as the Black Book, as it existed at the end of 2006 and/or as redrafted during the period August 2007 to September 2008 under the auspices of the Domestic Standing Group, as referenced in the Honohan Report and the Nyberg Report (details supplied); and if he will make a statement on the matter. [21091/13]

Department of Finance, Michael Noonan: The document referred to by the Deputy in his question was drawn up by the Central Bank of Ireland to provide it with a set of processes and procedures to assist it in the management of a financial crisis situation. The question of releasing the document is therefore a matter for the Central Bank of Ireland in the first instance. The document was shared with the Department of Finance on the understanding it would be treated in strictest confidence given the nature of the matters treated in the document. I do not therefore propose to provide a copy of the document.

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All has gone quiet on the new personal insolvency schemes until the end of June 2013, when the Insolvency Service is set to open for business, and it may be the end of 2013 when we have our first personal insolvency cases processed. At that point, people will find themselves on a public register with their name, addresse and age. In a country where the quarterly tax defaulters’ list still instills shame, the humiliation of being published in the insolvency record will not be easy, particularly for those working their way through debts which resulted from the property boom/crash and unemployment.

They may also want to contrast their naming-and-shaming with the approach adopted with the recent debt writedowns at Thomas Crosbie Holdings and Independent News and Media.

TCH is the publisher of the Irish Examiner, Evening Echo, Sunday Business Post and other local papers as well as the operator of local radio stations, and it has been given a debt writedown by AIB. We presently own 99.8% of AIB and next Monday, we will own 99.99% of AIB when it pays us in ordinary shares, a dividend on our preference shares. In March 2013, just before TCH entered a pre-pack receivership and, in the case of the Sunday Business Post, an examinership, it is understood that TCH owed €28m to AIB; and although we don’t know the debt writedown that was obtained as part of the receivership/examinership, the betting on here is that the writedown was more than €10m. Most of the papers and radio stations in TCH are now owned by Landmark Enterprises which is controlled by Ted and Tom Crosbie, shareholders in the old company and the fifth generation in the dynasty of Cork newspaper owners.

A €10m writedown may be large in comparison with some of the modest writedowns that people undergoing the personal insolvency scheme, will see, but is tiny in comparison with the debt writedown at Independent News and Media, Ireland’s largest newspaper publisher which counts amongst its stable the Independent, the Sunday Independent, the Sunday World, the Herald, the Belfast Telegraph and Sunday Life. Last month it reported that its banks were to writedown €138m of about €430m of loans. Both AIB and 15% state-owned Bank of Ireland were two of 6-8 banks with loans to IN&M, and it is believed both had around €80m of loans outstanding. Again, the state will be taking a big hit. IN&M is 30% owned by Denis O’Brien, who, with wealth estimated at €4bn is Ireland’s second richest person. And how many millions of a writedown has Denis received via his stake in IN&M?

You may never know. In the Dail this week, the Minister for Finance Michael Noonan was questioned about the writedowns. The response was curt – “due to data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances”

Alas, data protection won’t save the humiliation of those named-and-shamed on the new personal insolvency register.

The parliamentary questions and response are here:

Deputy Pearse Doherty: To ask the Minister for Finance if he will confirm the amount of debt forgiveness that will be provided by Allied Irish Bank to Independent News and Media as part of the latter firm’s recently announced reorganisation plans.

Deputy Luke ‘Ming’ Flanagan: To ask the Minister for Finance if he will state, in both absolute and percentage terms, the amount of the debt being written down by wholly and partly State owned lending institutions for Thomas Crosbie Holdings Ltd. and Independent News and Media Ltd; and if he will make a statement on the matter.

Deputy Luke ‘Ming’ Flanagan: To ask the Minister for Finance the percentage stake the State will now hold through Allied Irish Banks and Bank of Ireland in Independent News and Media Ltd. as a result of the debt for equity swop to facilitate the write down of INM Ltd. debt; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan: I propose to answer questions 132, 150 and 152 together.

I have been informed that due to data protection rules and customer confidentiality the banks are not in a position to discuss details of individual customer circumstances.

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“An Individual Voluntary Arrangement* would have produced a much greater financial return to NAMA and my other creditors. However, I have been advised that NAMA would never, and had by then never, engaged constructively with an IVA and so my only real option, in the absence of being able to satisfy the demand was to petition for bankruptcy. “ Businessman John  Fraher’s affidavit in his unsuccessful defence against NAMA’s application for a €5.9m judgment

This may not be a first, but it is the first that has made it into the media. Kerry developer John Cahillane is attempting to negotiate what the Brits call an Individual Voluntary Arrangement or “IVA” – see below* for summary explanation. This is an alternative to bankruptcy and is roughly akin to our Personal Insolvency Arrangement which allows for assets to be disposed of, for the debtor to work with their creditors over a period of time, and to provide what would usually be a better result for creditors.

In John’s case, he claims that if he files for bankruptcy, his unsecured creditors will receive 0c in the euro but through an IVA they will receive about 13.5c in the euro. John Cahillane says he has assets of €56m and liabilities of €73m. This is a Part 1 of a 2-part blogpost, Part 2 tomorrow will examine the IVA proposal in detail but in essence, John is trying to get NAMA to accept that its recourse is only to the property securing the loans, and John is saying he will make a €60k-odd contribution to the IVA from third party contributions – maybe from his wife, but that doesn’t appear to be specified – and from equity in his family home.

NAMA moved against John’s company in December 2011, having KPMG appointed as receivers to Cloonbeg Developers Limited. It would appear from the IVA that John subsequently relocated to the UK, his present address is in Kilburn, north London and he says he informed his creditors of this relocation in January 2013. He is presently employed as a business development executive with Purcell Development Services Limited, a new company in which John “identifies new development and construction projects for investors in the UK and Europe”.

John’s property businesses were based in Ireland (mostly Kerry, it seems), Portugal, mainland Spain, the Canary Island and Cape Verde.

John’s biggest creditor at €54m is NAMA following NAMA’s acquisition of AIB loans, and NAMA has apparently taken a negative position on the IVA proposal. This is seemingly a policy stance at NAMA, because John Fraher in a completely unrelated court matter last week, said in his affidavit that NAMA won’t entertain IVAs. NAMA was asked today to comment on its position on this IVA proposal, and also about its general stance towards IVAs. There has been no response at time of writing.

Other creditors, apart from NAMA, which comprise a minority of the €73m of debts, are more supportive – creditors in a Cape Verde scheme apparently owed €11m are supportive. There is a creditors meeting scheduled for Friday 10th May 2012 in London to determine the way forward. The London City branch of English accountancy firm, MHA MacIntyre Davis is acting on behalf of John Unfortunately John needs 75% of his creditors to agree to the proposal, and the scheme will fail unless NAMA accepts it.

What is an IVA?

Alternative to bankruptcy, akin to our personal insolvency scheme, but has very significant differences.

Term, can be days but typically is for five years, six if the IVA doesn’t force the sale of the family home

Assets and liabilities, like a bankruptcy, most assets are generally liquidated to pay the liabilities.

Pension pots, generally protected.

Family home. If your home is worth more than its mortgage, usually you’re required to re-mortgage and pay the equity into the IVA. If you can’t then your IVA period may be increased by 12 months.

Income. Like the personal insolvency scheme, you work out with your Insolvency practitioner, or IVA practitioner, what you need to live on and the rest gets paid into the IVA, which pays the practitioner and your creditors.

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Last month, NAMA moved against the Kennedy Group, the (London)Derry developer whose assets included the Ramada Portrush Hotel. The initial foreclosure was followed last week with news that NAMA succeeded in having seven additional properties placed in receivership. This afternoon, we learn that the Kennedys are suing NAMA in Belfast’s High Court. Details of the application are expected shortly and will be added as an update here.

Brothers, Alistair Kennedy and Christopher Kennedy (Chris Kennedy) are suing National Asset Loan Management Limited and IBRC; IBRC is now in special liquidation. The case reference is 13/042914 and the case is scheduled for mention next week, 14th May 2013.

We don’t know the details of the application or the remedy sought – but we will soon. But last month, Alistair Kennedy gave an interview to the BBC in the aftermath of the foreclosing on the Ramada Portrush Hotel loan, and he was not at all happy with NAMA’s actions, and seemed to believe that NAMA had acted hastily.

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BotanicInnsLogo

From Belfast this morning, we learn that Botanic Inns the company which operates 14 pubs in Belfast and employs 600 people has been placed in administration, with KPMG appointed as administrator. A fortnight ago, it was reported that NAMA developer John Miskelly was pursuing a winding-up order against the group after rent arrears arose on the pub chain’s head office building on Ormeau Road in Belfast. At the time, it was hoped that the recovery action would only affect the head office of the group, but this morning, KPMG has been appointed to administer the chain of pubs, restaurants and hotels whilst a buyer is sought. NAMA is a landlord to five of the 14 pubs, after NAMA foreclosed on loans in 2011 owed by Clare developers, Sean Lyne and Noel Connellan. In addition to the pubs, Botanic operates two hotels – Madison’s and Parador – and two off licences.

The news today follows a report in the Belfast Telegraph this morning claiming that three pubs a week were now closing in Northern Ireland, a jurisdiction that has suffered a greater economic downturn than the Republic, on a GDP-type basis – its unemployment rate has also risen to 8.5%, though that is considerably less than the 14.0% unemployed in the Republic. At present, all the Botanic outlets continue to trade as normal whilst the administrator seeks a buyer.

It is understood that NAMA showed some degree of flexibility on the terms attaching to the five outlets under its control. Ulster Bank is understood to be the other major lender to properties from which the group operates. Again, it’s business as usual for customers of the group, but there will be deep concern that not all of the outlets will survive.

UPDATE: 7th May, 2013. The Ulster pub trade body, Pubs of Ulster has issued a statement in which its chief executive, Colin Neill commented “on the latest news about the appointment of a joint Administrator to Botanic Inns Limited and its parent company Kurkova:

This is disappointing news for Botanic Inns Limited and its parent company Kurkova.
Botanic Inns is an iconic brand for the city of Belfast and right across Northern Ireland. It has always had the highest reputation and regarded as one of our blue chip companies and we must do all we can to help support it at this time.

We welcome the Administrators intention that the venues will continue to trade as normal and that regulars and visitors to the Botanic Inns pubs and bars should be reassured that they are open for business.

It is no secret that factors have accumulated over the past year which has made it a very tough trading environment right across the industry. The revenue reserves normally built up by publicans during the Christmas season have suffered in the current trading environment and the negative impact of the recent flag protests compounding the problems faced by the trade.

At the end of 2012 the number of pub licences in Northern Ireland numbered 1252, down from 1481 in the year ending 2007. This can be put down to a number of factors such as the change in social habits, property revaluations, non-renewal of licenses and the impact that supermarket pricing is having. The offer from our pubs and bars here is still of the highest quality and remains a valuable asset.

It is important to reiterate that the pub industry is a key economic driver and its health and vitality are crucial in the sustainability of the economy as a whole. It must be protected.”

UPDATE (1): May 14th, 2013. The BBC reports that six of the pub businesses in administration have been sold to “the Horatio Group”, which is controlled by Stephen Magorrian, the managing director of Botanic Inns up to last week. There is no word about the freeholds in the pubs whose businesses have been sold – “the Botanic Inn, Madisons Hotel, the Kings Head, the Northern Whig, the Elms and the Fly” according to the BBC. 300 jobs are understood to have been saved. There are seven other businesses being run by the administrator, also employing 300 people, and the administrator expresses confidence that these businesses can be sold also.

UPDATE  (2): May 14th, 2013. Industry group, Pubs of Ulster has issued a statement reacting to this morning’s news  in which Colin Neill, chief executive of Pubs of Ulster said “We are pleased to hear the news from the administrator that a buyer has been found for at least 6 of the pubs, including the iconic Bot, previously owned by the Botanic Group.

It is great news that around 300 jobs have been saved and some of Belfast’s most high profile pubs will continue to trade. This is not only good for the industry but vital for the economy here in Northern Ireland.

We are optimistic that the remaining pubs and jobs will be saved in the not too distant future given the quality of the outlets.

Although this is a stark reminder of the challenges faced by the industry in the current environment, we are working with the government and other stakeholders to protect one of the most important economic generators for Northern Ireland.”

UPDATE (3): 14th May 2013. It seems NAMA is the hero of the day, having renegotiated terms on its six properties which had previously been operated by Botanic Inns. The BBC reports that NAMA last negotiated the new terms with Horatio Taverns Limited, a company incorporated in February 2013 whose directors are Stephen Magorrian, his wife Laura Magorrian and Lorraine Ormsby. Apparently it is Ulster Bank which has failed to renegotiate terms, at least for the time being. Pricewaterhouse Coopers appears to have acted for Horatio in the successful negotiations with NAMA, and also in the unsuccessful negotiations with Ulster Bank.

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General
The reserved judgment in the Paddy McKillen
appeal hearing in London is due any day now
Monday 6th May 2013
Holiday in Ireland and UK
Tuesday 7th May 2013
(CSO) Vehicles licensed for the first time April 2013
(CSO) Mthly Services Index Mar 2013 (Provl) Feb 2013 (Final)
Troika review scheduled to conclude
Agriculture Oireachtas committee – Coillte sale
Wednesday 8th May 2013
(CSO) Crops and Livestock Survey June 2012
Finance Oireachtas committee – Pre-ECOFIN Min Finance
Sean Dunne creditors meeting Connecticut
Thursday 9th May 2013
(CSO) Consumer Price Index April 2013
Friday 10th May 2013
Central Bank provisional banking figures April 2013

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“For the avoidance of doubt our client was employed as Area Manager during his tenure at Anglo and did not have any part in the board structure of the organization nor did he have any role in the decision making process…Not only have you sought to denigrate our client’s reputation by incorrectly exaggerating his position at Anglo, you have done so with the deliberate and apparent intention of implying that he is unfit to work as an insolvency practitioner” [ENDS] Letter received on here by email on 1st May 2013 from Northern Ireland solicitors, Johnsons. The letter refers to their client, Neil Adair who was described on here as a former boss of Anglo in Northern Ireland after his tenure from 1995-2005, as head of Anglo’s operation in Northern Ireland, a period which ended with Anglo building up a loan book of almost €1.5bn.

Well, this has been a nerve-fraying week here at NWL with the receipt of its first “solicitors letter”, or rather email. The debut “letter”, the Hayes Solicitors email on Tuesday evening was, to an extent, expected. It sought an undertaking that detailed information, reported in general terms on here the previous day, would not be published. The troublesome information formed part of an affidavit filed in the High Court on Monday and apparently showed that NAMA had provided third parties with details of loans, names, par values and NAMA acquisition values. It is disappointing that NAMA itself didn’t seek such an undertaking, especially as it had been asked for comment on the information the previous day. The undertaking sought by NAMA’s solicitors was readily given, though a complaint was sent to the Data Protection Commissioner with the troublesome information attached. And that is where that matter lies. But like buses, solicitors letters this week arrived in twos.

The second letter was not at all expected, and forms the subject of this weekend’s media blogpost. Firstly, here is the letter.

JohnsonsLegalLetter

For those of you unfamiliar with Johnsons, it is a Belfast firm originally, and has developed a considerable reputation in the area of defamation law. Its crown jewel, is solicitor Paul Tweed, pictured below, who has been the figurehead of the firm in a string of defamation actions.

TwoPillarsOfSociety

Paul has represented former TD Frank Fahey who won a “six figure sum” against the Daily Mail last year; he’s represented Louis Walsh and won a €500,000 libel claim against the Sun newspaper last year; he even won a case against Ryanair after it was unkind to Chris de Burgh’s daughter. This year, Paul “won” a €50 donation from Tweeter, Kevin Barrington to the (still) Poor Clares and an apology after “a series of tweets” relating to entrepreneur and political activist, Declan Ganley. Most recently, Paul has been representing Paddy McKillen who is on the warpath trying to find out who at IBRC has allegedly leaked details of his loans. Paul has even penned a book on defamation, and Paul is reported to be one the people behind this website which offers a “take down” service to clients to remove “inaccurate or defamatory material”

NetLibelPricing

Paul even finds time to blog on his own website www.paultweed.com.

So, imagine the shock on here, when an email from Johnsons was opened to reveal the letter above, signed simply by “Johnsons” but with a letter reference beginning “PT” – could it be the famous Paul himself who penned it? Possibly not, would Paul go to the trouble of drafting a definition of  “the Website” in the letter, and then not make a single further reference to “the Website” and would Bangor-man, Paul really address a letter to “Dublin, Ireland” which might be considered un-PC in some quarters.

The main subject of the letter was a relatively straightforward blog-post here titled “Anglo boss reinvents himself as insolvency practitioner” which reported that a NAMAed developer and former boss of Anglo Irish Bank in Belfast, Neil Adair – pictured here – was now working as an insolvency practitioner. A search of this blog indicates that there have been five previous blogposts about PBN, not many on a blog which has generated 2,600 blogposts, considering PBN is one of NAMA’s biggest developers in Northern Ireland and Neil had a prominent role in Anglo in Northern Ireland up to 2005 and his co-founder at PBN, Patrick Kearney is reported to be one of the so-called “Maple 10” which was the name given to the group of 10 of Anglo’s customers who accepted loans to buy Sean Quinn’s shares in Anglo.

In the original blogpost, there was a single sentence incorrect statement about Neil being part of Maple 10; that blogpost was posted on Tueday at 12:19 and was corrected here on Tuesday at 18:13 or thereabouts, and not at the behest of Neil Adair or any solicitor, or indeed anyone making a complaint at all. When a mistake is made, it is important to rectify that as sincerely and speedily as possible. Johnsons’s letter was sent at 16:46 on Wednesday and the clarification and apology blogpost was posted here at 17:38. So, a day after the “Maple 10” mistake was rectified, an apology was sought and, as there is no shortage of apologies in the old media, an apology was given in the format used in the recent Irish Times apology to Ronan King following an article by Colm Keena; a fulsome apology was duly provided to Neil Adair as to the Maple 10 error made in the original blogpost.

However, the letter from Johnsons goes much, much further than pointing out an error – albeit one that that had been previously corrected – and seeking an apology; the letter claims that Neil Adair had no decision making role at Anglo. It goes on to state there had been a “deliberate and apparent intention” on here to cause damage to Neil. This is complete and utter rubbish.

As for Neil’s role in Anglo, on his own biography on his employer’s, PJG’s, website, it is stated about Neil, that he “more recently headed up the Northern Ireland operation of a Business Bank” Presumably the “Business Bank” is Anglo, but regardless, there is a plethora of headlines in the old media characterizing Neil’s leading role – for example here and here and here.  And that is aside from underlying reporting, that by 2006, Anglo in Northern Ireland had built up a loan book of €1.5bn, with Neil working with Anglo from 1995-2005. But despite this, the general interpretation of the Johnsons’s letter is that Neil had “no role in the decision making process” at the Northern Ireland Anglo operation. And under threat of “the considerable sum of damages to which he [Neil] is arguably entitled”, there is a demand to remove the entire blogpost.

As for the remainder of the original blogpost, there is no specific challenge by Johnsons to the facts of any claim made. PBN Property Limited recently filed its accounts available here. The accounts are qualified; this is the extract of what the auditors, Maneely McCann say:

PBNQualification

PBN Property Limited’s accounts show that the company is balance sheet insolvent, that is, where its liabilities exceed its assets by GBP 4,041,185. This is the balance sheet:

PBNBSinsolventBS

So, the original blogpost, as corrected on Tuesday, is not being taken down. It reports on a man characterized as the boss of Anglo in Northern Ireland for a decade; Anglo is a bank which has cost us across all its operations in all jurisdictions a €29bn bailout; Neil is a man now working as as an insolvency practitioner with a firm offering its services in the UK “and overseas” with Neil’s biography on his website saying he “has substantial experience of working with financially stressed companies in Northern Ireland and the Republic of Ireland” and he is at the helm of one of NAMA’s biggest borrowers in Northern Ireland though he appears to have resigned a directorship in March 2013, and one of the companies in his group, which confirms it is a NAMA borrower, has recently filed auditor-qualified accounts which show the company is balance-sheet insolvent.

This is the mainstay type of reporting for which this blog was established.

And Johnsons Solicitors demand the permanent takedown of the article.

As for some of the details in the letter from Johnsons, the NWL Jagdip Singh has never had an association with Talbot Street in Dublin, Ireland a street in the capital well-known for its zombified heroin addicts; there’s a debt-addicted media company down there somewhere too. A little internet research indicates that the Talbot Street address may have been pulled by Johnsons from the bottom of this website, where a number of people air their views on a NWL blogpost. “Jagdip” is deliberately non-gender specific and, as the blog is anonymously authored, non-cardinal specific too, so the “Dear Sir” is presumptuous on the part of Johnsons, as are other “understandings”.

Having said that, this blog has a solemn duty of care to ensure blogposts contain accurate information – and, in that regard, the amount of fact-checking and hyper-linking to sources on here is backbreaking. But, where a mistake occurs, the rectifying response needs to be swift and sincere and, as for the “Maple 10” error, that is exactly how it was responded to.

The reaction of the blog’s audience to the manner in which the NAMA injunction threat earlier in the week was dealt with, was universally positive, with many, many messages of support, a few donations with messages like “chin up!” and general and specific offers of assistance; however in respect of the second legal letter this week, I know that some of you will be uneasy about the approach taken above, but if this blog is to have a future, it needs to be able to report, in a non-airbrushed fashion, on exactly the subjects such as formed the basis for the blogpost here this week.

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I believe the revelation of the overall value of Sean Dunne’s creditors last night – put at USD 942m on his filing – took some by surprise, with the expectation the total would have been closer to the USD 500m lower limit in the range Sean had indicated in his initial filing on 29th March 2013. Sean has even omitted a liability when he notes the amount owing to KPMG as “unknown”.

This is a brief blogpost on the creditors. Firstly this is the list sorted in descending order. We had previously known of a €164m (USD 215m) judgment against Sean in favour of Ulster Bank, so it was a surprise to see Sean listing his Number 1 debtor as Ulster Bank owed USD 394,334,536.  It was also surprising to see another NAMA developer, O’Flynn Construction listed as being owed USD 102,061,490; however, it is understood that this loan was in de facto provided by Irish Nationwide Building Society and the loan has since been transferred to NAMA, so it is NOT O’Flynn Construction which is the owed the money. Alas, NAMA won’t comment on individual loans.

SDCreditorsSortedName

If we group the loans according to assignment, we see that NAMA is in fact Sean Dunne’s largest creditor with USD 445,323,628 owed, comprising original loans from IBRC of USD 188,216,722 and Bank of Ireland of 151,158,009 and O’Flynn Construction of USD 102,061,490. Bank of Scotland’s loans appear to have been all assigned to Certus though a company incorporated last November 2012 called Risali Limited appears to have acquired USD 16,975,267 of those loans.

SDCreditorsAssigned

If we group the loans according to type, we see that an astonishing USD 612,217,333 is “unsecured non priority” with only USD 280,215,656 secured. All of the banks appear to have been guilty of advancing loans not secured on specific property, which must surely call into question further the behavior of Irish banks during the boom.

SDCreditorsType

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