Nama tells court it was right to act over Treasury

THE NATIONAL Assets Management Agency does not have the “luxury” of allowing insolvent developer Treasury Holdings “indefinitely debate” issues with it or allow matters “drift indefinitely” at the taxpayers’ expense, the High Court was told yesterday.

If Treasury is granted leave for a judicial review of Nama’s appointment of receivers over its assets here, the State agency will seek a court order requiring Treasury to provide security for the costs of that case, said Paul Sreenan SC, for Nama.

As those costs are likely to amount to several million, Nama’s move to seek security may have an impact on how the Treasury case develops, according to legal sources. If granted leave, Mr Sreenan also indicated Nama will seek a “fortified” undertaking from Treasury for damages in the event of the developer losing any full judicial review proceedings.

Treasury indicated yesterday it is withdrawing its additional application for an injunction restraining the receivers dealing with its assets. However, it is considered unlikely the receivers will take any steps prior to the determination of the leave application.

Yesterday was the fourth day of the hearing before Ms Justice Mary Finlay Geoghegan of the application by Treasury Holdings and 22 related firms for leave to bring a judicial review challenge.

Treasury is disputing decisions made last December and January to call in loans and appoint receivers over Treasury’s assets here, which include the PricewaterhouseCoopers head office in Spencer Dock and the Alto Vetro building on Barrow Street in Dublin.

Nama denies the disputed decisions were made in breach of Treasury’s rights to fair procedures or that it acted in “bad faith” concerning the timing of the receivership decision.

Mr Sreenan said Treasury had made out no substantial issue concerning its right to be heard such as entitled it to be granted leave.

From September 2011 on, Treasury had clear indications and warnings from Nama, that if it did not meet certain requirements, including a strategy to deal with its creditors, Nama could take steps including the appointment of receivers, counsel said.

By December 2011 Treasury had cash reserves of about €4.1 million and creditors of about €18 million, counsel said. From September 2011 onwards, Nama and a syndicate of banks sought a credit strategy from Treasury but it was only produced two months later on November 23rd.

Nama had raised various deficiencies in that strategy with Treasury, deadlines were extended and Treasury was given “every indulgence”. On December 7th, Nama was told the Treasury exposure to creditors was €5 million higher than a €13 million figure earlier provided.

This occurred after a Nama evaluation process indicated that creditor figures did not include accruals and the “constant changing” of creditor figures “caused considerable alarm”, he said.

There had to be “an end” to the process at some stage, Mr Sreenan said. “No one can come into court and say they are entitled to an open-ended process particularly at the expense of the public purse.” In these and other circumstances, the board of Nama was entitled to take its decision on December 8th, 2011, to enforce repayment of loans and to direct its executive to appoint receivers at a time it considered appropriate, he said.

The receivers were appointed on January 25th after expiry of a two-week “standstill agreement” which Nama agreed at Treasury’s request, he said.

The hearing resumes on Tuesday.