Archive for the ‘Developers’ Category

Tilman Brewin Dolphin, formerly known as Tilman Asset Management is understood to have sold a retail block on Kings Road in the upmarket Chelsea area of south west London, turning a €13m profit on the reported purchase price in 2004. According to commercial property portal, CoStar, the 15,000 sq ft 6-unit property – which houses five retailers named as Petit Bateau, Reminiscence, Accessorize, Vodafone and Timberland – has been sold to Cadogan Estates for GBP 29m (€34m). Cadogan Estates is the property company owned by the Earl of Cadogan who originally owned much of the freehold of property in the Chelsea and Kensington areas.  The initial net yield is reported to be a lowly 3.65%.

The property was reportedly bought by the Irish consortium in 2004 for GBP 18.3m (€22m) yielding an overall profit of close to €13m. The initial net yield of 3.65% in last week’s reported sale would equate to a net yield previously of 5.75% to Tilman. So, looks like a very profitable property investment.

Tilman Brewin Dolphin, based in Clonskeagh in Dublin, says of itself it “provides a comprehensive service for the management, protection and growth of client wealth”

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The reserved judgment in the Paddy McKillen
appeal hearing in London is due any day now
IBF mortgage drawdowns for Q1,2013 due
Central Bank arrears/repossessions Q1,2013 due
Monday 13th May 2013
Eurogroup meeting Brussels
Tuesday 14th May 2013
EcoFin meeting Brussels
Wednesday 15th May 2013
Allsop Space auction in Shelbourne Hotel, Dublin
IPD UK commercial property indices April 2013
(CSO) Agricultural Price Indices March 2013
(CSO) Industrial Disputes Quarter 1 2013
Educn & Soc Protection Oireachtas comm: rent allowance
Thursday 16th May 2013
(CSO) Goods Exports and Imports March 2013
KBC Ireland Q1,2013 results
ECB Governing Council meeting
Good Friday Agreemt Oireachtas comm: Narrow Water Bridge
Friday 17th May 2013
(CSO) Trade Statistics February 2013

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It should be said upfront that Eddie Hobbs’s Brendan Investments Property Management has issued a statement here in which it states that it is aware of legal action against a Michigan USA company called “Metro Property Group” but stresses that there is no claim or alleged impropriety being made against Brendan Investments. Brendan Investments is jointly owned by Eddie Hobbs, Dermot Flanagan, Hugh O’Neill and Vincent Regan, with each being a director. The company in its statement expresses confidence in the US company now being sued.

This week in a Michigan District Court, a group of investors represented by celebrity lawyer Deborah Schlussel has filed a case alleging serious misconduct by a Michigan property company, Metro Property Group and associated companies and individuals. The 116-page complaint is here and it makes for fascinating reading. In brief, a group of UK, Australian and Yemeni investors are claiming shenanigans on the part of Metro and others and want their investment back. Finance and economics pundit and TV personality Eddie Hobbs (50) is dragged into it because his company Brendan Investments has apparently teamed up – “partnered” according to the lawsuit claim – with Metro for property investment, though again, to stress, there is no allegation of any impropriety on the part of Eddie or his company.

The lawsuit does however refer to Brendan Investments and claims it has “recently partnered” with Metro with Brendan Investments “reportedly” providing what is called “an infusion of €15m”. A request for comment from Brendan Investments was made before 5pm today, but was not responded to at time of writing. There is comment reported in the old media from Hugh O’Neill, a director of Brendan,  who says “there are a number of inaccurate references to Brendan Investments in the filing.” Ms Schlussel, the lawyer representing the plaintiffs, was asked for information relating to the alleged €15m infusion by Eddie’s firm, and again, there has not been any comment at time of writing.

So, what’s the beef? It is alleged that Metro buy extremely run-down houses in Detroit for between USD 500-5,000 and that they sell them to investors for USD 40,000-50,000 promising impressive returns of, for example, 16.9% per annum from rent alone, that the buildings aren’t habitable, that Metro manage the properties and after a few months, a tenant who may be a fake stops paying rent and the investors are left with dud property and no income. It is also alleged the buildings aren’t “up to code” and that investors have been fined by state authorities because of the condition of the properties.  The complaint is written in colourful language and paints the Metro Property Group as a bunch of villains, accusing it of operating a Ponzi scheme “reaching mini-Madoff proportions”. It even suggests that profits from the alleged scam may have ended up with Iranian-backed Lebanese political and military group, Hezbollah, a group regarded as terrorists in the US.

There is no filing in the case, on Metro’s part yet but newspaper reporting carries comment from Metro that it says the action is unfounded and that Metro is confident the case will be thrown out of court. One of the defendants is a lawyer, Tarek Baydoun who has provided comment to the media and says “allegations of any wrongdoing are completely ludicrous” and “I’m firmly denying any wrongdoing whatsoever” The colourful language in the lawsuit probably won’t do much for its credibility over here where we’re used to more sober allegations, but having said that, there are very specific – and presumably easy to prove or disprove – allegations in the lawsuit which paint a worrisome picture, and although there is no allegation of impropriety whatsoever against Eddie’s Brendan Investments, he may find himself fielding questions about the safety of investments with this US company.

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It has been relatively quiet this week with Sean Dunne’s bankruptcy in the Connecticut bankruptcy court – the creditors meeting that was scheduled for Wednesday has been moved to 29th May 2013 apparently at NAMA’s request, though given it had one working day to review Sean’s statement of affairs filed at 10pm last Friday, perhaps that request was understandable even if they had seen practically all of the information before when Sean presented NAMA with his business plan and accompanying documentation. The bankruptcy trustee was also scheduled to have quizzed Credit Suisse, People’s United Bank and a Bruce Shaw employee, Andy Smyth, this week.

Last night, Sean did file a “means-test calculation statement” which is intended to set out in detail the income and expenses of the bankrupt. However, in Sean’s case, he unsurprisingly states that his debts are not primarily consumer debts, and is therefore exempted from providing the minutiae of his financial income and outgoings. For your information though, the statement is here.

Also yesterday, NAMA’s lawyers, New Jersey firm, McCarter and English filed a statement – available here – with the Connecticut bankruptcy court showing that NAMA’s lawyer Thomas Goodwin is a lawyer is “good standing” and should therefore be accepted as NAMA’s legal representative in the Connecticut bankruptcy.

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Following reporting of the John Fraher affidavit here last week, which prompted the threat of an injunction by NAMA, a complaint was made to the Office of the Data Commissioner about the apparent disclosure by NAMA to third parties of confidential loan information. The ODPC provided an initial response which included a statement that NAMA has now made a report on the leak to it; further questions asked are extant, but the ODPC has a target of responding to messages within 15 working days.

You will recall that the data apparently disclosed by NAMA included names of individuals and companies and businesses with the par value of loans together with the amount NAMA paid for the loan. This is highly confidential personal information, and according to John Fraher, the details included borrowers with which he was not directly connected.

Elsewhere in the Dail on Wednesday, the Sinn Fein finance spokesperson asked Minister for Finance Michael Noonan about the apparent leak. In what is one of the most bizarre responses seen on here, Minister Noonan says he does not propose to comment as the disclosure is a matter within the jurisdiction of the Courts.

No, it is not. The Courts recorded a judgment of €5.9m against John Fraher, and that is the end of the matter. But the leak of the information by NAMA is completely peripheral to the (disposed of) court case.

I doubt you have heard the end of this matter.

The parliamentary question and response are here:

Deputy Pearse Doherty: To ask the Minister for Finance further to an affidavit filed in the High Court in Dublin in which the National Asset Management Agency was seeking a judgment against a person (details supplied), if he will confirm that NAMA has provided confidential details, both the par value of the loan and the NAMA acquisition value, to persons not directly connected to the borrowers; and if he will make a statement on the matter. [21635/13]

Minister for Finance, Michael Noonan: I am advised that this matter relates to a position taken by a NAMA debtor in attempting to defend judgment proceedings taken by NAMA against him. I do not propose to comment as this relates to a matter which is within the jurisdiction of the Courts.

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After Sean Dunne filed for bankruptcy on 29th March, NAMA was asked how many of its developers have now filed for bankruptcy outside (the Republic of ) Ireland. When asked the same question a year ago, NAMA said that approximately 20 had filed for bankruptcy elsewhere. However, NAMA declined to provide a up-to-date figure two weeks ago, and said that it would publish such information in its 2012 annual report which is now set to be published early this year in June 2013.

NAMA was also asked how much debt it has written off following foreign bankruptcies. And surprisingly it said it has written off no debt whatsoever. That is surprising because we have now reached the stage where those who went to London to file for bankruptcy have served their 12 months and are being discharged. For example the Grehans, who owed NAMA about €600m in total, were discharged at the end of 2012/start of 2012, but the first high profile NAMA bankrupty in the UK was that of Cork developer, John Fleming who filed for bankruptcy in November 2010 and was discharged in November 2011. John owed €1bn to his creditors with a sizable proportion owed to NAMA.

So, 18 months after his discharge, John is financially reborn and the slate is wiped clean. Yet NAMA has not written off a cent of what it was owed. NAMA says that it is awaiting the bankruptcy trustee to dispose of all the property. This seems almost incredible, 18 months after the discharge from bankruptcy and begs the question whether NAMA is overstating its profit by failing to write off the debts of those discharged from bankruptcy.

These are the parliamentary questions and responses.

Deputy Pearse Doherty: To ask the Minister for Finance further to Parliamentary Questions Nos 198 and 199 of 23 April 2013, when he stated the National Assets Management Agency advises that even there the bankruptcy is discharged, the bankruptcy estate continues until such time as all assets have been liquidated and the debt, insofar as possible, has been repaid and in relation to the discharge from bankruptcy in Britain of a person (details supplied) in November 2011, if he will confirm that NAMA has still not written off the unpaid debt originally owed by the person to NAMA, and that generally, NAMA has not yet written off any debt as a result of bankruptcy by its debtors in foreign jurisdictions..

Minister for Finance, Michael Noonan: As previously advised, even where a bankruptcy is discharged, the bankruptcy trustee continues to deal with outstanding debt until such time as all assets have been realised and the debt, in so far as possible has been repaid.   NAMA advises that it is precluded from commenting on individual cases. As has also been previously advised, NAMA has not written off debt arising from debtor bankruptcy applications.

Deputy Pearse Doherty: To ask the Minister for Finance if he will confirm the total number of individuals who are debtors of the National Asset Management Agency who have filed for bankruptcy outside the jurisdiction of the State.

Deputy Pearse Doherty: To ask the Minister for Finance if he wil provide an estimate of the total amount of original par value debt written off by the National Asset Management Agency as a result of debtors filing for bankruptcy outside the jurisdiction of the State..

Minister for Finance, Michael Noonan:I propose to take questions 198 and 199 together.

NAMA is currently finalising its Annual Report and Financial Statements for 2012. I am advised that these will contain extensive information regarding its operations, including its insolvency activity and the locus of debtor bankruptcy proceedings. I am advised that the Report and statements will be published within two months.

NAMA advises that it does not write off debt as a result of debtors filing for bankruptcy outside the jurisdiction of the State.  Rather, it is a matter for the bankruptcy proceedings to deal with the outstanding debt. NAMA advises that even where the bankruptcy is discharged, the bankruptcy estate continues until such time as all assets have been liquidated and the debt, in so far as possible, has been repaid.

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Last week, NAMA announced that it has at last sold its Project Aspen portfolio of €810m par value loans that related to Dublin developer, David Courtney. But what about Project Club, the c€300m portfolio which relates to loans to developer, Eamon Duignan. Sources are this afternoon claiming that NAMA has pulled the sale amid general concerns that borrowers are teaming up with potential buyers which is undermining the reputability of NAMA’s processes.

You will recall that when NAMA sold Donal Mulryan’s €250m of UK loans to Morgan Stanley that Donal then became a consultant to Morgan Stanley after the sale. Out of sight, out of mind it seems and the involvement of Donal never made news in Ireland. But in the case of the recent sale of David Courtney’s Project Aspen, there was considerable comment on David’s involvement with Starwood pre-sales and before the portfolio was offered to the market and that he will act as a consultant for a period post-sales.

In the case of Project Club, NAMA delayed bringing it to market following criticism of its failure to provide a valuation to bidders on Project Aspen – the absence of a valuation, which would be shared with all potential bidders, was seen as unusual and is understood to have had a deterrent effect on bidding generally. However, NAMA duly went about getting a valuation of Project Club after the criticism with the previous portfolio. Now it seems that NAMA has become sensitive about borrowers teaming up with potential bidders for single-borrower portfolios, and there has been some unsubstantiated talk of Eamon Duignan having an involvement with a potential buyer, Patron Capital Partners.

NAMA and Patron were both asked for comment, but there hasn’t been a response at time of writing.

A fortnight ago, the Sinn Fein finance spokesperson Pearse Doherty challenged Minister for Finance Michael Noonan about borrower involvement in single borrower portfolio sales. It seems NAMA has taken the concern on board. If the story is confirmed, it would seem that it won’t stop NAMA selling loan portfolios, it will just mean that loans from different borrowers will in future be packaged for sale so as to prevent any particular borrower conferring benefit on a potential bidder.

This is the parliamentary question and response:

Deputy Pearse Doherty: To ask the Minister for Finance following news that the National Asset Management Agency is selling large portfolios of loans which bundle together loans to a single borrower, if he is concerned that the borrower may derive a benefit from providing pre-sale advice to certain bidders. [18471/13]

Minister for Finance, Michael Noonan: I am advised by NAMA that it cannot preclude market participants from approaching debtors to discuss their property assets or to indicate potential interest in acquiring either properties or loans. Nor can NAMA preclude debtors from engaging with such potential purchasers. To do either would be counterproductive and could stifle normal commercial discussions in the property market and in particular could discourage international investors from exploring acquisition possibilities in Ireland. However, NAMA has very clear rules regarding the open marketing of loans or of properties on which it holds security.

As set out in response to recent Parliamentary Questions on the topic of NAMA loan sales [44286/12, 44287/12, 44288/12, 44189/12, 1549/13, 8753/13, 8754/13], NAMA has adopted a very thorough approach in line with accepted international market best practice for the sale of loan portfolios. As part of the formal sales process, potential purchasers are required to provide an undertaking that they will not engage with the debtor or other obligors at any stage during the sales process. Both debtors and potential purchasers are aware that the infringement of agreed protocols or undertakings may have an impact on NAMA’s decisions as to whether and to whom it sells a particularly portfolio. Furthermore, where NAMA approves the sale of any loan or approves the sale of any secured property by a debtor, it requires a confirmation that the purchaser is not connected to the debtor or other obligors.

Having ensured, as far as possible, that the sales process is conducted on the basis of all parties having equal access to the necessary information at the same time and that such primary sales are not made to the relevant debtors or to connected parties, NAMA advises that it has no legal right to intervene in any further future management or sales of the loan or underlying property in question post disposal.

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