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Posts tagged ‘Paddy McKillen’

NAMA and Paddy McKillen

SIMON CARSWELL Finance Correspondent

VALUERS FOR the National Asset Management Agency (Nama) cut the valuation given by Anglo Irish Bank to four of Paddy McKillen’s prime US properties by 27 per cent but said that his five-star London hotels were worth 10 per cent more than the bank had assessed.

The properties valued included Anglo’s US head office at 265 Franklin Street in Boston. This was valued by the bank at $131 million (€93 million) compared with a final valuation of $95.6 million set by Nama.

Details of the valuations were provided in filings submitted by Nama in the High Court case taken against the agency by Mr McKillen, a property investor.

The hearing of the case finished yesterday before a three-judge division led by Mr Justice Nicholas Kearns, the president of the High Court. Judgment will be given on November 1st.

Anglo valued the five-star Claridge’s, Berkeley and Connaught hotels in London and properties linked to the Maybourne Hotel Group at £822 million (€934 million); the final valuation agreed by Nama was 10 per cent higher at £905 million.

A final value of £424.9 million was assigned to Claridge’s by Nama for the transfer of Anglo’s loans on the hotels to the agency. The Berkeley was valued at £246.4 million and the Connaught was valued at £183.6 million.

Two other properties associated with the hotels – one in Mayfair and the other in Knightsbridge, London – were valued at £28.8 million and £22.2 million respectively in final valuations set by Nama.

Full story here  http://www.irishtimes.com/newspaper/finance/2010/1015/1224281153988.html

Mean while again SIMON CARSWELL and MARY CAROLAN tells us

FORMER ANGLO Irish Bank chief executive David Drumm has filed for bankruptcy in the United States after the State-owned bank rejected his proposal to settle its legal action in the High Court in Dublin over loans of €8.5 million.

Mr Drumm applied for bankruptcy in a Boston court in Massachusetts near his US home at 3pm Irish time yesterday in advance of the bank’s case starting on October 26th.

Lawyers for Mr Drumm told the commercial division of the High Court in Dublin a short time later that Anglo had last Friday rejected a final settlement offer that he had proposed on September 24th.

He had offered to hand over all assets to Anglo excluding personal effects such as clothes and jewellery, his lawyers said.

Anglo’s counsel told the Dublin court that the US bankruptcy application was “quite an extraordinary turn of events” and that the bank had only just become aware of it.

Lawyers for Mr Drumm said he had “bent over backwards” to reach a settlement of the action. Counsel for Anglo said that it was “a bit rich” for Mr Drumm to seek to take the “high moral ground”.

It is understood that Mr Drumm claims that he proposed handing over assets to Anglo valued at €10.8 million to settle the action.

The 44-year-old former bank chief had offered to put up his €5.4 million pension, under which he is entitled to annual payments of €271,000 from the age of 55.

The assets on offer included half the proceeds – estimated at €1 million – from the sale of a house at Abington in Malahide, Co Dublin, and the transfer of another property in Cape Cod, Massachusetts.

He also offered to hand over €200,000 covering his half-share of a property in Boston which his wife bought from her own funds.

His lawyers had claimed in their September 24th settlement offer that he was “frustrated with the un-commercial stance being adopted by the bank in relation to his proposals”. Following his application, Mr Drumm may retain his €5.4 million pension and could emerge from bankruptcy within a much shorter period than in Ireland. An official appointed by the US court will now liquidate all his assets through forced sales in a move which may result in Anglo recovering a lower amount.

Under the shareholder agreement with the State-owned bank, Minister for Finance Brian Lenihan has control over the bank’s dealings on the loans with former directors.

It is understood that the Minister instructed the bank to take whatever action necessary to secure full repayment of the debts. Anglo’s lawyers claimed in correspondence last July that the Minister was aware of Mr Drumm’s attempts to settle.

It had been anticipated that Mr Drumm would use the hearing of the bank’s action later this month to meet voluntarily with gardaí and other investigators examining the collapse of Anglo, which is costing the State up to €34.3 billion.

Planning such a meeting was now “up in the air” following Mr Drumm’s bankruptcy application, said a well-placed source.

The High Court was told the US court action may or may not disrupt Anglo’s case but this was out of Mr Drumm’s hands, his lawyers said.

It is understood that Mr Drumm has had extensive contact with the Garda Bureau of Fraud Investigation and the Office of the Director of Corporate Enforcement about their investigations and in relation to planning a meeting with them. It is also understood that he has recently made contact with the Government’s commission of investigation, led by former senior Finnish civil servant Peter Nyberg, which is investigating the causes of the banking crisis.

Anglo’s case will be returned before Mr Justice Peter Kelly, who has been managing the case, in the Commercial Court next Tuesday.

source

http://www.irishtimes.com/newspaper/frontpage/2010/1015/1224281156871.html?via=mr

comment :

This is unbelievable stuff why are we even giving this guy the time of the day he should be brought back in handcuffs and forced to divulge all he knows about the fraud that went on in this toxic bank. This Pusey footing does not go on to the thousand of decent people that cannot pay their TV licenses and their ESB bills they are brought before the courts for the pittance the owe and yet we have this guy who was at the heart of this corrupt toxic bank that has cost us Billions and possible up to 50,000,000,000:00 billion trying to dictate terms.

We must see prosecutions and jail time been dispensed to all the crooks and no exceptions!

That is why we need a totally new kind of representive in the next Dail people who are not part of the in circle but ordinary people who know which side of the car  there petrol cap is on, people who know that our bills are going up and not going down as advocated by our politicians

People who know what it is like to struggle to pay their mortgages  in other words we need real people living on the same planet we the ordinary people have to live on and not the pampered planet our TD’s have been living on most of their lives

we need to overhall system ,its time for renewal and it can’t come soon enough

A word of warning, the politicians are contemplating ways to cling on to their plum jobs and perks by trying to extend the life of this corrupt and so out of touch government with this notion of a “national government” any such attempt to deprive the public of their democratic right to have a say in their own destiny as laid out in the Irish constitution will bring the public out on to the streets big time .We need a new political mandate to see us through the tough decisions that have to be made but it would be a major mistake to allow the very people and their cronies who caused this disaster to stay in power. Clear them all out and start afresh I say!

Paddy Mc Killen and NAMA (2)

Is NAMA capitulating to to-paddy-mckillen

namawinelake | August 3, 2010 at 1:35 pm

source http://namawinelake.wordpress.com/2010/08/03/is-nama-capitulating-to-paddy-mckillen/

News today that Paddy McKillen has at last made the sale of that Bond Street property on which pesky Bank of Ireland had previously put the kibosh. The Irish Times had reported previously in relation to Paddy’s judicial review application: “Mr McKillen claims the loans are “fully performing” and their transfer will have “a seriously detrimental impact” on the value of the underlying properties. For example, he said he planned to sell an investment property on Old Bond Street in London for €18.2 million last May, but when he went to enter a contract on the deal he was told by Bank of Ireland that the sale had to be approved by Nama, even though the loan on the property had not yet been acquired by Nama.”

Well NAMA finally seems to have agreed the sale and Paddy has got his €18.2m which is being described as “exceptional”. The company that sold the freehold in the building on Bond Street was Metrospa Limited which is one of the 15 companies joined with Paddy in his application for a judicial review. And with news that the Maybourne group is close to securing finance from the US property company Westbrook Partners and one other unnamed property trust, one wonders whether there will be any NAMA-eligible loans by the time the application for the judicial review is finally heard.

So Paddy may well keep his assets away from NAMA. Certainly bad news for NAMA as they are increasingly depending on performing loans to avoid having to go cap in hand back to the Department of Finance for yet another handout. Being deprived of €800m-plus of Paddy’s performing loans will hurt.

Comment:
This is bad news for the Taxpayers as we will now end up with all the Toxic stuff and the developers will run away with the choice bits just like I expected they would.
NAMA is a Fraud and a con on the Irish taxpayers
Plain and simple it’s a bailout for the FF Backed developers and Bank fraudsters

Central Bank report for Quarter 2

Just more lies?
Central Bank report for Quarter 2, NAMA’s resident and non-resident borrowers
namawinelake :
source http://namawinelake.wordpress.com/2010/07/31/central-bank-report-for-quarter-2-nama%e2%80%99s-resident-and-non-resident-borrowers/

The wide-ranging quarterly Central Bank report and forecast published yesterday contains some interesting nuggets on NAMA and Irish property in general. On NAMA, it publishes information on the first tranche which hasn’t been publicly seen before, namely a split of the first tranche loans between resident and non-resident borrowers and also gives the provision the banks held for the loans transferred. The information is on page 39 of the report and is summarised here.

Of note is that the writedown by NAMA on the loans (49.6% in total) comprises a writedown by the banks themselves (23.7%) and NAMA’s additional write-down (26.9%) – given that Anglo’s accounts were published on 31st March, 2010 and INBS’s accounts were published on 9th April, 2010 and they each contained the government’s recapitalisations announced on 30th March, 2010, it is indeed amazing that they were showing their provisions at such a low level – was it a case that the accounts were produced many months earlier and only amended for the government’s injections of capital – wasn’t there any attempt to show the imminent NAMA haircuts? As to the split between resident and non-resident, I’m not sure how much can be deduced. For information the following were reported by the media (not confirmed by NAMA and indeed Paddy McKillen’s spokeswoman has denied that Paddy was in tranche 1) as being the Top 10 developers in the first tranche – spot the non-residents!
Liam Carroll
Bernard McNamara
Sean Mulryan
Derek Quinlan
Paddy McKillen
Treasury Holdings
Michael O’Flynn
Joe O’Reilly
Gerry Gannon
Gerry Barrett
As to what the Central Bank say in their report on page 39 about the write-downs with respect to residents and non-residents they are talking rubbish – the figures show that the resident loans had greater write-downs at both the banks and at NAMA.

Tipping point to force NAMA back to the EU

our friends at namawinelake poses this question What is the State-aid tipping point to force NAMA back to the EU? Are we there yet?
namawinelake | July 16, 2010 at 8:01 am | Categories: NAMA | URL: http://wp.me/pNlCf-pw

As we enter a period of intense operational activity in NAMA (more tranches, debtor business plans, providing working capital and development funds to debtors and of course Paddy McKillen’s judicial review of the whole project) you could be forgiven for losing sight of the over-all context for NAMA. To help counter a serious disturbance in our economy, NAMA was part of a range of measures to rescue banks that were seen as being systemic to our economy. It was understood from the outset that NAMA would involve State-aid being given to private-sector banks and this was mainly expressed in the mechanism whereby NAMA was not paying the present market value of the loans but was paying a premium – the Long Term Economic Value (LEV) premium. This premium was State-aid and is recognised as such by the EU.
Of course when approval was sought for NAMA – remember the old numbers, €77bn of loans, €54bn of consideration, €47bn present asset values, €7bn LEV premium – that State-aid had a value of €7bn which was subject to a reduction of €2.7bn if NAMA didn’t make a profit (5% of the €54bn original planned consideration was going to be via subordinated debt which would not be honoured if NAMA didn’t turn a profit). When granting approval to NAMA in February, 2010, the EU made some changes to the way in which NAMA calculated consideration and attempted to reduce the State-aid through forcing NAMA to apply a higher discount rate to the LEV.
Crucially NAMA was seen to be acquiring the assets in a relatively short window, by the end February 2011. Further, although not acknowledged by the EU, the Irish government asserted that property prices were close to the Bottom and stabilising. However they weren’t anywhere near the Bottom and 7 months after the 30th November, 2009, the NAMA Valuation Date, commercial prices in the State are off 8% and residential is off by more than 8% (by reference to March 2010 and more likely 10%+ today) and the rate of decline has accelerated for commercial. So with up to 8 months remaining for NAMA to acquire the remaining 80% of the total NAMA loan portfolio, it may be that the actual Current Market Values (a term defined by NAMA and assessed by reference to 30th November, 2009) of assets may be considerably less than the actual values on the date of transfer to NAMA. Meanwhile the metrics by which the Long Term Economic Value (another NAMA term and crucial to the amount of State-aid going to the banks in respect of NAMA loans) are measured may be leading to overvaluations, for example the latest forecast from the ESRI indicates that the population of the State will fall this year and next, something not envisioned by the sources (reports from the ESRI produced before 10th January, 2010) on which NAMA has been directed to rely in the LEV Regulation. So NAMA is likely to be overpaying for the loans transferred – where’s the problem given the EU signalled their acknowledgement of NAMA being a State-aid vehicle? The problem is that at some point where property values continue to collapse and the LEV outlook deteriorates, the unrecouped State-aid paid by NAMA to the banks will reach an unacceptable point.
Now of course not every aspect of the environment in which NAMA operates has deteriorated since last November 30th, 2009 – the UK commercial market is up nearly 9% (with a jump of 3% in December 2009 alone), the UK residential market is up nearly 5%, the euro has weakened against some currencies which may improve unhedged NAMA loan values, the UK’s proportion of NAMA loans went from 27% last October 2009 to 20% in April when the NAMA CEO was questioned by an Oireachtas Committee to one third when Brian Lenihan replied to a question in the Oireachtas two weeks ago, short term forecasts for economic recovery (measured by GDP and GNP) have improved in the State. Although this is a subjective assessment, these improvements are minor compared with the continued property value collapse in NAMA’s primary market – Ireland, and the realisation that our population is not likely to grow in the short term and that net migration may be outward for some time to come (population being a key driver in demand for property).
Another issue that might concern the Competition Directorate is that NAMA was intended to realise the LEV of the loans acquired, but recent noises coming from Treasury Buildings give the impression that NAMA will be offloading assets sooner rather than later. The concern would be that NAMA will dispose of assets before they had the chance to recover to their LEV level, or to express it another way, the actual LEV realised by NAMA is possibly going to be far less than the LEV used to pay the banks. Would this shortfall be another element of State-aid?
At what point does it stop being in NAMA’s discretion to go back to the EU to seek a change to its Valuation Date and the final date for any analysis it can use to calculate LEV, and when does it start being the EU’s obligation to call NAMA back to force NAMA to change these dates because the result of using the present dates is that the quantum of State-aid to the banks is unacceptable? Sadly because of the jiggery-pokery used by NAMA to calculate the consideration paid, it’s not exactly possible to understand what was envisioned by the EU and what is presently the case. The decline in Current Market Values is relatively easy to assess, though NAMA have not given any formal update on the split of NAMA loan assets between countries and indeed by property sectors. And of course no individual calculations of loans have been released by NAMA so all we know is that on average the LEV is 11% above the CMV. So all we can reasonably conclude is that State-aid has increased substantially in NAMA’s main market. Perhaps it’s time for the EU to step in and run more accurate numbers to determine if we are yet at the tipping point which makes the quantum of State-aid unacceptable

Paddy McKillen V NAMA

Fast-tracking of Nama case sought
MARY CAROLAN

The National Assets Management Agency (Nama) and the State will ask the Commercial Court next Monday to fast-track the first legal challenge to the agency by businessman Paddy McKillen and 14 of his companies over the proposed transfer of Nama of €80 million loans of the companies.

Mr McKillen claims the €80 million credit facilities from Bank of Ireland are “fully performing”, not impaired, there is no default on repayments, and transfer of the loans would have a “drastic and significantly detrimental” impact on his business and property rights.
He has also expressed “grave concern” about the impact internationally of transfer of the loans to the “toxic bank”, the implications for his companies abilities to raise additional facilities and the valuations placed on the loans by Nama.

For instance, Nama had obtained a Stg£725.9 million valuation from CBRE for assets on which a loan for the UK Maybourne Hotel Group was secured when he had last month obtained a valuation of Stg 994.78 million from Cushman & Wakefield Hospitality

Ltd, he said. He was concerned such valuations would drive down the realisable value of his companies property portfolio.

Mr McKillen said his companies had not purchased any Irish assets since 1998 “and hence have not engaged in speculative development”. His companies instead invested in “world class retail centres and other quality assets”.
source http://www.irishtimes.com/newspaper/breaking/2010/0714/breaking56.html

This is just the bigining of a long legeal battel and I suspect the Taxpayers of this country will again fut the bills
everybody involved will walk away with fat pay cheques except the poor taxpayers of Ireland

Banks await loan acquisition schedules

Nama has missed three deadlines as lenders and the agency struggle with complex valuations, according to

by SIMON CARSWELL 

source http://www.irishtimes.com/newspaper/finance/2010/0227/1224265277431.html

NOW THAT the valuationshas signed off on the National Asset Management Agency (Nama), the delayed task of transferring the top 10 developers and loans of €17 billion can proceed.

The green light from Brussels allows Nama to start buying loans with a face value of about €80 billion from five guaranteed lenders for an estimated €54 billion, though both figures could change.

Preparatory work has so far proceeded slowly with the amount of paperwork connected to the top borrowers creating a bottleneck of information within Nama that its small staff and army of outside contractors are busy trying to process.

Preliminary work has been slow as the lenders, and Nama, have struggled to deal with complex valuations in a market with no buyers, and grappled with tricky legal and financial due diligence on title and loan files, with dedicated teams of staff in each lender.

Nama has missed three deadlines to process the transfers, the most recent being yesterday.

March 5th has been set as the next deadline when the first transfers will begin, though not all of the loans connected to the top 10 will move on the day. Minister for Finance Brian Lenihan has said the top 10 borrowers will be transferred by the end of next month.

As revealed first by The Irish Times last week, they are developers Liam Carroll, Bernard McNamara, Seán Mulryan of Ballymore, property financier Derek Quinlan, Joe O’Reilly, the developer behind the Dundrum Shopping Centre in Dublin; Paddy McKillen, owner of the Jervis Street Shopping Centre in Dublin; Treasury Holdings (which is owned by Johnny Ronan and Richard Barrett); Cork developer Michael O’Flynn; Dublin builder Gerry Gannon, co-owner of the K Club golf resort in Co Kildare; and Galway businessman Gerry Barrett, owner of Ashford Castle in Co Mayo and G Hotel in Galway.

The financial institutions are awaiting acquisition schedules outlining the specific loans that Nama will acquire as well as the crucial “haircut” to be applied to each.

Once known, this will allow the banks to assess the losses to be incurred on the discounted sales, which will trigger a requirement for capital to meet the shortfall.

State-owned Anglo Irish Bank faces the most pressing capital need as it is moving the largest amount in the first wave – close to €10 billion of the €30-€35 billion it will eventually transfer.

Allied Irish Banks is moving more than €3 billion in the first wave, Bank of Ireland over €2 billion, Irish Nationwide just shy of €1 billion and EBS building society about €150 million.

The commission will assess the compatibility of the transferred loans as well as the actual transfer prices when they are passed on by the Government to Brussels. These reviews include mechanisms to allow for the claw back of money in case of overpayments.

The lenders are already preparing the paperwork for the second and third waves of transfers, though they have pressed Nama to reduce the level of information demanded by the agency.

Given the volume of paperwork and the scale of the sums involved, processing the top 10 borrowers will preoccupy Nama and the banks for most of next month.

As with all complex transactions the devil is in the detail

Two points that immediately spring out of this article is the inbuilt reviews that include a claw back facility on possible overpayments

This will have consequences for the Banks balance sheets as this clearly implies a possible debt !

The second point is that the banks seem to be reluctant to give full details and are pressing NAMA “to reduce the level of information demanded by NAMA”

This cannot be allowed, under any circumstances

 

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