THE NATIONAL Assets Management Agency made a “dramatic” decision last December to proceed with appointing receivers over assets of various Treasury Holdings companies without telling the developer which was then in advanced negotiations with investors, the High Court was told yesterday.
Treasury claims the proposed receiverships could threaten 400 direct jobs here, could result in no further development of its Spencer Dock site in Dublin, could close the Ritz-Carlton Hotel in Co Wicklow, could lead to the closure of the company which owns Dublin’s National Convention Centre and collapse the Sligo Town Centre project.
Nama acquired Treasury debts with a face value of some €1.5 billion in 2010 but Treasury claims, while accepting it is “balance sheet insolvent”, it could have continued to operate had terms been agreed with Nama and could have advanced plans to achieve a “once-off sale” to investors of practically all its loans.
Treasury claims an investor, Macquarie Corporate and Asset Finance Ltd, offered a “generous” price of €622 million for its loan portfolio while another “more complex” bid from Hines offered “a potential total return” to Nama and the Spencer Dock banking syndicate of some €600 million.
Both those proposals required “significant” vendor financing by Nama, Treasury said.
Those offers were comparable with a €805 million offer from US real estate firm CIM approved by the Nama board in 2010 (which ultimately did not proceed) when allowing for the fact Battersea Power Station and other loans were not part of the portfolio being sold, Treasury said.
The “major benefits” to Nama and the State if such a commercial deal was concluded would “far outweigh” the scenario offered by a group receivership, it claims.
Treasury’s goal was to exit Nama via such a once-off sale and it fears the agency’s actions in moving to appoint receivers will result in a piecemeal sale and the break-up of its “valuable portfolio”, Michael Cush SC, for Treasury, said.
Mr Cush was opening a hearing before Ms Justice Mary Finlay Geoghegan of Treasury’s application for leave to bring a judicial review challenge to Nama’s actions.
Treasury claims that Nama’s “crucial” decision of December 8th to proceed with appointing receivers was not made known to the developer until about a month later even though both sides were in contact throughout December, counsel said.
Treasury contends the December 8th decision, and a decision in January to call in the loans and formally appoint receivers over various assets, are invalid. It claims the decision was made without notice to the developer and without giving it an opportunity to be heard, in breach of its right to fair procedures.
The developer has also alleged “bad faith” on the part of Nama concerning the timing of the receivership decision.
The proceedings by Treasury and 22 related companies arose after Nama indicated it intended to appoint receivers to assets of the companies in Ireland, including the PricewaterhouseCoopers’ office in Spencer Dock and the Central Park office complex near Leopardstown.
Treasury claims Nama’s actions could have a domino effect within the group, threatening its survival.
The State, KBC Bank, Irish Bank Resolution Corporation (as agent for a syndicate of banks which made loans to Treasury) and the joint receivers – Luke Charlton and David Hughes – are notice parties to the case.
The judge heard Nama strongly disputes Treasury’s claims and contends it had “engaged rigorously” with Treasury since 2010 but its proposals on the way forward were not commercially acceptable.
The hearing continues today.
