Insolvency no bar to rights, says Treasury

BEING INSOLVENT did not deprive Treasury Holdings of its constitutional right to make representations before the Nama-appointed receivers over its assets here, the developer has argued before the High Court.

Treasury’s interest in being heard also arose from its “experience and expertise” in managing its assets, Michael Collins SC, for Treasury, said.

The developer, the court heard, wants Nama to approve “investment” proposals which involve Treasury managing those assets into the future for fees of about €9 million a year.

Jobs and Treasury’s reputation were also involved, Mr Collins said. Treasury had a “very substantial” reputation here and in China, but that would be, and already had been, adversely affected by Nama’s decision to call in its loans.

Nama was not intended to be “just some Dickensian debt collector” which, out of the goodness of its heart, would lend money to Treasury, counsel said. It also could act as a property developer as it had wide powers to take steps to enhance the value of assets and to refinance loans.

Arguing that Nama had decided to call in the loans without giving Treasury a proper opportunity to address various issues raised by the agency, Mr Collins said Paddy Teahon of Treasury left a meeting on December 22nd, 2011, with Nama thinking he had “cleared the air” and that matters were “on track”, but unaware all the decisions had been made.

Opposing Treasury’s application for leave to challenge the receivers’ appointment, KBC Bank, which is owed €75 million by Treasury, argued that even if Nama had taken a different view, it would make “no difference” as KBC had lost faith in the management of Treasury.

Treasury could “bleat and cry and whinge” all it liked to Nama but KBC had decided separate “investment” proposals procured by Treasury from Macquarie Corporate and Asset Finance Ltd and Hines were “defective”, “unrealistic”, “unworkable” and “unacceptable to any commercial lender”, Lyndon MacCann SC, for KBC, said.

Those proposals, the court has heard, required Nama to provide most of the funds for those companies to acquire Treasury loans transferred to Nama.

Ms Justice Mary Finlay Geoghegan heard final arguments yesterday from KBC and Nama in the application by Treasury Holdings and 22 related companies for leave to bring a judical review challenge to Nama’s decisions last December 8th and Jabnuary 25th to call in its loans and appoint joint receivers.

Earlier, in his closing arguments, Paul Sreenan SC, for Nama, said that if Treasury secures leave for a judicial review challenge, the agency will look to Treasury’s shareholders, Richard Barrett and John Ronan, to personally provide undertakings to pay damages if Treasury ultimately loses that judicial review.

An undertaking for damages from Treasury itself – which has overall debt of €2.7 billion – would be “worthless” so, if Treasury is granted leave, Nama will want Mr Barrett and Mr Ronan to provide a fortified undertaking for damages, he said.