Transfer of €7m at heart of Project Eagle controversy

Money discovered by Belfast law firm was apparently fees from US firm Cerberus

The Project Eagle story dates back to June 2013, when DUP politician Sammy Wilson told the Minister for Finance Michael Noonan that US lawyers Brown Rudnick contacted him on behalf of two potential buyers for Nama's Northern Ireland loan book. One of them was the giant US investment firm Pimco.

Early the following year Nama auctioned its Northern Ireland assets as "Project Eagle", and US firm Cerberus subsequently bought the portfolio.

It started a chain of events that led to claims of conflict of interest and the uncovering of a fund alleged to have been put together to pay off senior business figures and politicians.

In mid-2013, Noonan referred Wilson to Nama. Pimco contacted the agency in September 2013, expressing interest in buying the portfolio. Nama discussed the matter at the meeting of its Northern Ireland Advisory Board in October.



Encouraged by the buying interest, Nama subsequently auctioned all the Northern Ireland debts, which had a face value of €6 billion.

In January 2014, it hired London agency Lazards to run the process. Three US funds emerged as serious contenders: Cerberus, Pimco and Fortress. They were bidding for the loan book and effectively for control of the property assets pledged as security for these loans.

In March, Pimco told Nama it had agreed to pay a £5 million success fee to a former member of the agency's advisory board, Northern Ireland businessman Frank Cushnahan, whom it intended to hire as an adviser alongside Brown Rudnick and Belfast solicitors Tughans, who were also, it said, getting £5 million each. Pimco then dropped out of the race. It says it did so voluntarily; Nama says it told the company it could no longer bid for Project Eagle.

Brown Rudnick and Tughans switched as advisers to Cerberus, which had already hired A&L Goodbody as its lawyers. Cerberus's £1.24 billion bid, which was in line with Nama's reserve price, succeeded in April 2014, and the deal went through in June. After the sale was agreed, the firm's chairman, former US vice-president Dan Quayle, met at Stormont with the North's First Minister Peter Robinson and Ian Coulter, then managing partner at Tughans.


The controversy centres on the discovery byTughans last January that £7 million was transferred from the firm to an

Isle of Man

bank account, following which Coulter resigned from the firm. The money, in an account controlled by Coulter, was apparently fees from work the law firm did for Cerberus.

Last week, loyalist blogger, Jamie Bryson told the Northern Ireland Assembly's finance and personnel committee the money was earmarked for Robinson, Coulter, Cushnahan, accountant David Watters, and developer Andrew Creighton.

Robinson dismissed the claim as scurrilous. Creighton and Watters said they never sought or received any payment in relation to Project Eagle. Cushnahan has said he had no contact at all with Cerberus.

The assembly committee began its inquiry in July. At the same time, the UK's National Crime Agency began investigating the transfer of the £7 million to the Isle of Man.



Gareth Graham

, a businessman who controlled some of the properties sold as part of Project Eagle, last week met the US Department of Justice, the Federal Bureau of Investigation and the Securities and

Exchange Commission

– the stock-market regulator – to discuss a complaint he made regarding Cerberus.

When the portfolio was sold, Northern politicians welcomed the deal. However it is clear they also had concerns stemming from issues raised with them by developers. One was personal guarantees, which allowed lenders to pursue individuals if their companies failed to repay their debts.

During the property bubble, banks that subsequently transferred their loans to Nama sought them from developers almost as a matter of course.

As a result, the agency, and any organisation that bought debts from it, inherited the right to enforce them.

Official records show Wilson specifically raised the concerns of Northern borrowers about personal guarantees with former finance minister Brian Lenihan, in February 2010, when the two ministers met to discuss Nama and the banks.

Brown Rudnick’s letter to Wilson said Pimco was willing to cancel the guarantees. In December, Pimco’s own letter to the Northern Ireland Executive repeated this. Nama has said in the past that cancelling such safeguards would amount to a debtors’ charter.

Details released this week of the telephone conversation between Noonan, Robinson and McGuinness show the First Minister stressed the “comfort” provided by the commitments Pimco made in the letter regarding its management of the assets.

The note states that: “He further indicated that similar commitments from any buyers would be welcome.”


A group of Project Eagle’s biggest borrowers have since refinanced their debts with another US firm, Jefferies Loan Core (JLC), which means they have paid Cerberus and replaced it with a new lender.

PBN, now known as Kilmona, completed this in July and company records show it owes its new creditor £122 million. Shortly before this deal was done, Robinson attended a dinner hosted by the company in Carrickfergus that was intended to celebrate the refinancing.

Lagan Development (Holdings), owned by brothers Michael and Kevin Lagan, and MAR Properties, now controlled by Noel Murphy, did similar deals with JLC in August.

Lagan and MAR did their deals through a single entity called Salvare. Documents show loans against a huge number of properties, including apartments, developments and sites in or close to Belfast, have been refinanced.

Personal guarantees

They also show two of Noel Murphy’s big investments in Britain, Blackpool Business Park and Wolverhampton Airport, both of which

Anglo Irish Bank

funded, have been refinanced.

The documents do not indicate if any of these developers have given personal guarantees this time.

The net effect of these deals is that many of the big developers in Project Eagle are now back in business and out from under the debt burden they faced in the wake of the financial collapse.

At the same time, Cerberus's letter to the Northern Assembly committee indicates it will make about €270 million profit from the deal, although that could turn out to be a modest estimate as it works through those parts of the portfolio it has not already sold on.

Barry O'Halloran

Barry O'Halloran

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