Treasury Holdings has 'no viable business left'

TREASURY HOLDINGS has “no viable business left” and has produced no evidence to show how it can function without the support of the National Asset Management Agency, the High Court was told yesterday.

Treasury’s cash position had fallen from €35.8 million in 2010 to €4.1 million in 2011 and it has provided no figures about its up-to-date cash position, Paul Sreenan SC, for Nama, said.

With debt of €2.7 billion and liabilities of €859 million, Treasury had produced no evidence to show how it could run its companies and pay its debts without money from Nama, which the agency was not obliged to extend, he added.

Counsel said Nama has discretion to dispose of loans as a portfolio or individual loans, and an injunction restraining receivers appointed by Nama over various Treasury properties here from dealing with those properties would not be in the public interest.

A lengthy process was undertaken before the receivers were appointed last January and Treasury had every opportunity to say why Nama should not do so, he argued.

Treasury management and shareholders were “highly sophisticated” and had made it their business to familiarise themselves with Nama, even to the extent of telling Nama what powers it should look for, he added.

Urging Ms Justice Mary Finlay Geoghegan not to grant Treasury’s application for orders restraining the receivers acting, counsel said it was “highly relevant” that Treasury is insolvent, with some €1.7 billion of loans in Nama and further non-Nama debts of €1 billion.

It was not disputed that Treasury has net liabilities of about €859 million and, in circumstances where Nama had acquired its loans, Nama had no legal obligation to agree terms with it concerning its business, counsel said.

A creditor strategy advanced by Treasury to Nama proposed almost all unsecured liabilities be paid ahead of secured debt, he said.

Mr Sreenan said, notwithstanding those submissions, Treasury was given “plenty of opportunities” by Nama to be heard in relation to a proposed way forward for the group prior to Nama’s decision on December 8th last to proceed with appointing receivers.

Mr Sreenan also agreed yesterday, in response to a question from the judge, that Treasury had agreed last November to pre-conditions from Nama concerning how to deal with a controversial transaction – the Tail transaction – where the benefit of €20 million shares had been transferred out of the group to the benefit of its promoters Johnny Ronan and Richard Barrett for a loan note and €100,000.

Nama has insisted that, at no stage, did it accept the propriety of that transaction, approved by the Treasury board when it knew Treasury’s loans were going into Nama.

The agency has said it was a key point of discussions with Treasury that the transaction be reversed but, to date, that still has not occurred.

Treasury contends the Tail transaction was valid and the shares were sold at market value to Mr Barrett and Mr Ronan and paid for via loan note.

While agreeing yesterday that Treasury had agreed to a Nama pre-condition concerning Tail, Mr Sreenan said Treasury came back after that and looked to build into that a proposal allowing Richard Barrett buy the shareholding of Treasury Holdings China Ltd.

Yesterday was the third day of the hearing of the application by Treasury Holdings and 22 related companies for leave to bring a judicial review challenge and for an injunction restraining the receivers acting.