Treasury yields €40m for Richard Barrett, the man with the Midas touch
Opinion: property developer has the last laugh in his dealings with Nama
Unlike so many of his peers, Richard Barrett apparently never gave the sort of personal guarantees that have been their ruin. Photograph: Eric Luke
Hats off to Richard Barrett, the property developer who turned an accusation of fraud by Nama into a settlement in which he walked away with a €5 million success fee and €35 million in cash.
There is more than a touch of the John Grisham about it. Not surprisingly, Mr Justice Peter Kelly had to take a few days to get his head around this turn of events, before eventually approving the deal last week as being in the best interest of the liquidation, and both legally and commercially justified. Taxpayers may take some convincing, given the tough talking done in Nama’s early days about pursuing developers for every penny they owed.
The details of Barrett’s alleged fraud and the subsequent coup are set out in detail in the affidavit supplied to the High Court by Michael McAteer, the liquidator of Treasury Holdings, in seeking to have the deal approved last week.
Barrett, along with his Treasury partner John Ronan, were accused of carrying out two asset-stripping transactions in the dying days of Treasury – which had debts of €2.7 billion, including €1 billion owed to Nama – that in effect defrauded the company’s creditors.
One was called the Tail transaction for short. It involved the pair selling themselves Treasury’s interest in a large portfolio of Chinese properties. They bought the shares at an undervalue and using an IOU that was pretty much unenforceable, it was claimed.
The other alleged fraud involved the sale by Treasury to Mr Barrett of two other companies which managed the Chinese properties for something close to one fifth of their real value. This was called the ManCo transaction.
The net effect of these two transactions was to separate the bankrupt carcass of Treasury from the Chinese asset, which has had many names over the past year but is currently called Forterra. Both Mr Barrett and Mr Ronan were significant shareholders in Forterra in their own right, owning in the region of 30 per cent.
As relations between Nama and Treasury took a turn for the worse last year Nama sought to unwind the Tail and ManCo deals. Once the company was put into liquidation, Mr McAteer took charge of the case.
According to his affidavit, Mr McAteer had negotiated and agreed preliminary heads of terms with Richard Barrett “to resolve the Tail Transaction and the ManCo Transaction” in January this year, when the latter came up with another plan.