Project Eagle: Pimco knew Cushnahan was to share £16m fee - lawyers

Brown Rudnick counters US company’s account of dealings over Nama loan portfolio

Lawyers at the centre of the row over Nama's sale of its Northern Ireland loans portfolio say one of the bidders, US company Pimco, knew that former Nama adviser Frank Cushnahan was to share in a £16 million fee long before Pimco pulled out of the auction.

Pimco wrote to the Dáil's Public Accounts Committee, which is investigating the €1.6 billion sale of the loans, known as Project Eagle, saying it pulled out of the auction in March 2014 after US lawyers Brown Rudnick approached it in February seeking a £16 million fee that was to be shared with Mr Cushnahan and Belfast solicitors, Tughans.

In a response to the PAC, Brown Rudnick chief executive Joseph F Ryan says Pimco "always understood" that Mr Cushnahan and Tughans were to share in a success fee which one of the US company's own legal team, Hugh Mildred, capped at £16 million.

Mr Ryan, in a letter to the PAC, says that on September 26th, 2013, Pimco wrote to Brown Rudnick saying: “You have indicated to us that the success fee you receive will be split into three equal parts between yourselves, Tughans Solicitors and Frank Cushnahan CBE”.


He adds that, contrary to Pimco's letter to the PAC, the US company understood that one third of the fee would be paid to Tughans, not to Mr Coulter personally. His letter states that the company knew of Mr Cushnahan's involvement with Nama from an early stage.

Pimco account

His account contradicts what Pimco legal officer Tom Rice said to the PAC in a letter dated November 8th last. Mr Rice stated that Brown Rudnick approached the company about the possibility of buying the Nama assets in April 2013 and introduced it to Mr Cushnahan and Mr Coulter.

Pimco maintained the law firm first sought a fee in June 2013 and confirmed that this would be split between Mr Cushnahan, who was then a member of Nama's Northern Ireland Advisory Committee, and Mr Coulter. Mr Rice said the company refused and asked if Nama was aware of its adviser's involvement.

Pimco said Brown Rudnick made a second approach in February 2014 and again confirmed the three-way split. At that point, Mr Rice said it informed Nama and told the agency of Mr Cushnahan’s involvement.

He told the committee that, following a series of exchanges with Nama, Pimco decided it had no option but to withdraw. He also said it never formally engaged either Mr Cushnahan or the law firms.

However, Nama has contested this version of events and maintained it left the US company with no option but to withdraw because of the potential conflict of interest involving Mr Cushnahan.

Mr Ryan’s letter also states that Pimco sought to change the original agreement in early 2014 so that Mr Cushnahan and Tughans would be paid for consultancy work they would carry out after the company succeeded in buying Project Eagle.

He also states Mr Cushnahan was not involved when both Brown Rudnick and Tughans switched to advise the successful bidder Cerberus, on March 24th 2014, just weeks before Nama accepted its €1.6 billion offer for Project Eagle.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas