Property developer Bernard McNamara is seeking damages and an indemnity from the Dublin Docklands Development Authority (DDDA) in relation to a deal where clients of Davy Stockbrokers are seeking to sue him for €95.84 million.
The case, which was admitted to the Commercial Court today, involves the former Glass Bottle site in Ringsend, which was acquired when a company called Becbay paid €424.34 million to acquire the site’s owner, South Wharf plc, in early 2007. The purchase price including €288.4 million borrowed from AIB and the now nationalised Anglo Irish Bank.
Becbay had three shareholders: Mr McNamara’s company, Donatex; the DDDA; and a company called Mempal Ltd, controlled by property financier Derek Quinlan. They put varying amounts into the deal being, respectively: €57.5 million; €32.2 million; and €46.3 million. Mr McNamara, as part of the arrangements made, signed a guarantee with Anglo for €41 million of the sum advance to Becbay, and for 41 per cent of all interest payable.
The equity put in by Donatex was sourced from private clients of Davy Stockbrokers, and was again guaranteed by Mr McNamara.
In his affidavit in the case Mr McNamara says that he was contacted by Paul Maloney, the then chief executive of the DDDA, in October 2006, and asked if he was interested in purchasing the Ringsend site along with the DDDA. Part of the proposition put by Mr Maloney was that the DDDA could fast-track any planning permission application for the site, by way of the powers assigned to it.
In October 2008 the High Court delivered judgment in a case called North Wall Property Holding Company Ltd and Sean Dunne vs the DDDA in which the court ruled that the DDDA was acting ultra vires in an arrangement similar to the one concerning the glass bottle site. Mr McNamara said this meant the DDDA was precluded from performing its obligations under the agreement he made with it concerning the Ringsend site.
Ringsend Property Ltd, which represents the Davy clients, has instituted proceedings in the High Court seeking €94.84 million from Mr McNamara and Donatex, with the sum comprising the principal amount, accrued interest, and a redemption premium, the Commercial Court was told.