Court dismisses Treasury challenge

A High Court judge has dismissed the challenge by troubled developer Treasury Holdings to the National Asset Management Agency's decision calling in more than €1 billion of its loans and appointing receivers over its properties here.

Ms Justice Mary Finlay Geoghegan today ruled, because Treasury had entered into a standstill agreement with Nama under which it undertook not to take certain legal actions if Nama considered certain bidding proposals, it was not entitled to the orders sought.

Treasury, which is insolvent with total debt of more than €2.7billion, had argued the decision calling in its loans was made without notice to it and without giving it a proper opportunity to be heard. The judge agreed it was entitled to such an opportunity but went on to find the standstill agreement prevented it getting the orders sought.

Nama denied those and other claims and also contended it could not be expected to engage in "endless debate" with Treasury before calling in the €1 billion loans when Treasury was unable to continue trading without money from Nama.

The agency also argued the terms of the "standstill agreement" between the sides, under which Nama agreed to consider proposals by other parties to acquire the loans before proceeding to enforcement, are such as to prohibit Treasury succeeding in the legal action.

Treasury Holdings and 22 related companies secured leave earlier this year to bring the proceedings challenging Nama's December 2011 decision calling in the loans and a January 2011 decision appointing receivers.

The action was opposed by Nama and KBC Bank, owed €75million by Treasury. It was heard over seven days.

KBC argued Treasury's action is pointless in circumstances where KBC had said it would not agree to any restructuring of the Treasury loans. In a notice served on June 29th last, KBC said it will seek an order winding up Treasury Holdings within a period of 21 days unless it is paid €20million.

Nama earlier this month also issued demands for repayment of €3 million each to John Ronan and Richard Barrett in their capacity as guarantor of a €13.5million loan to Treasury.

In a statement this afternoon, Nama  welcomed the court's decision. “[Nama] will continue to work with the Nama-appointed receivers in this case to maximise the return to the taxpayer.”

However,  Treasury this afternoon confirmed it would mount an appeal against the judgment.