Crosbie received €1.7m from Vicar Street for expenses
Harry Crosbie tells Commercial Court he was advised not to draw salary in same period
Harry Crosbie: said putting his son Simon’s home in his own name to save on stamp duty was “error of judgment”. Photograph: Collins Courts
Harry Crosbie took no salary for nearly three years from his last remaining business – Vicar Street, a music venue in Dublin – but drew some €1.7 million from it to pay for his living and trading expenses, the Commercial Court has heard.
During that period, 2013-2016, he paid about €30,000 in income tax, the court also heard.
Mr Crosbie said he had been advised, after most of his businesses were taken over by Nama, not to draw a salary or profits until a dispute with Ulster Bank over rent on Vicar Street was sorted out.
He was examined on Tuesday by Paul Sreenan SC, for Nama, as part of its efforts to execute a €77 million judgment obtained against him in 2014.
Mr Crosbie had previously supplied statements of affairs that showed he had made various loans, gifts and transfers of cash to his wife, Rita, to her business Cafe H at Grand Canal Dock, and to his daughter Alison.
Those transfers were done on the basis of financial advice to make the best use of cash within the family businesses.
He accepted he had paid the mortgage on his daughter’s €700,000 home in Booterstown from Vicar Street takings and also paid the local property tax for that house, as well as for a house owned by his wife in Wexford. While that tax should not have been paid, he expected he would get back the money back from his daughter, as this was a loan.
He said his son Simon’s home, also in Booterstown, had originally been put in Harry’s name to save on stamp duty.
Mr Crosbie said he now realised that was an error of judgment as it had also been used as security for his indebtedness.
However, under an agreement, Nama had agreed to release any claim over his son’s home and his own home at Hanover Quay, Dublin, Mr Crosbie said. He had transferred his 50 per cent interest in the family home to his wife and did not know the value of it. Nor had he asked to know, “because I was in Nama”.
While efforts were being made to sell three apartments he part-owned in Villefranche-sur-Mer, France, he believed the €850,000 price tag would have to drop to some €500,000 if they were to sell.
He had transferred his share in another property on the Côte D’Azur to his wife. They went to that property about three times a year and it did not generate any income, he said.
Asked why Vicar Street, which was also excluded from the Nama claim, was valued at €6 million in 2012 and at minus-€4.2 million four years later, Mr Crosbie said this was partly due to an issue over rent arrears to Ulster Bank. It had originally bought the property and rented it out to Mr Crosbie at €700,000-€850,000 per annum.
Mr Crosbie said both he and Ulster Bank benefited under a double rent allowance scheme from this arrangement, but after the economic crash the venue was not making enough money to pay the level of rent sought.
Aiken Promotions, which puts on shows at the venue, rents the premises from Mr Crosbie at €400,000, and Mr Crosbie runs the bars and provides maintenance. There was no written contract with promoter Peter Aiken, and they had always operated on the basis of a handshake, Mr Crosbie said.
The minus-€4.2 million valuation was also due to problems in relation to title relating to the overall property which had been extended by renting adjoining buildings. It was also on the basis of a similar valuation approach used when Mr Crosbie’s share in the Point Depot was sold by Nama to meet his debts. The Point was sold for some €35 million, or about six times its profitability, he said.
Using that equation, and taking into account the €4.1 million rent arrears, that was how the Vicar Street valuation was arrived at. He was in regular communication with Ulster Bank, which wanted out of the investment, but as yet no agreement had been reached.
Mr Crosbie said he believed the entire Point Village development – which includes a shopping centre, hotel and cinema – is worth tens of millions and would be more than enough to pay off his debt, but he was unable to find out what was going on with it because of Nama’s “secrecy”.