PROPERTY DEVELOPER Ray Grehan sold a multi-million pound apartment in one of London’s most expensive buildings for less than its value before he was declared bankrupt in a bid to put it beyond reach of creditors, a London court has been told.

The British justice secretary has given bankruptcy trustees permission to pursue Mr Grehan – who was bankrupted in Britain – over the Knightsbridge Hyde Park One property “on the basis that it constitutes a transaction at an undervalue”.

Mr Grehan and his estranged wife, Geraldine, are being separately sued by the National Asset Management Agency, which believes he has breached section 423 of the UK Insolvency Act, which bars attempts to defraud creditors.

However, Nama yesterday successfully sought to have a case due to be heard in October against the estranged couple vacated because of delays in getting documents from her. No order was made by the High Court on costs.*

The “net proceeds” of the sale of the Hyde Park One apartment in Knightsbridge, which was bought by Mr Grehan for £3.7 million in 2007, must be returned to his estate, according to Nama solicitor Andrew Bartlett.

Last November, Mr Grehan, one of Ireland’s most high-profile developers before he defaulted on his loans, was ordered to pay back €300 million by the High Court in Dublin.

Nama is also seeking to have a leasing agreement on Apartment B.04.3, One Hyde Park, 100 Knightsbridge, made between Mr Grehan and a company called Postlake, in August 2010, set aside.

“There has not yet been sufficient disclosure of documents in the proceedings and further documents need to be disclosed by Geraldine Grehan and the trustees, some of which are in the hands of third parties,” Mr Bartlett said.

“National Asset Loan Management cannot prepare its evidence in response to [her] evidence until it has received proper disclosure of the relevant documents that support and adversely affect her case.”

Nama, according to Mr Bartlett’s witness statement, believes Ms Grehan’s disclosure to date has been “inadequate” and that “extensive further disclosure is required”.

Ms Grehan claims a number of investment properties registered in her husband’s name “were in fact held on resulting or constructive trust for her and Ray Grehan in equal shares”, Mr Bartlett added.

“Furthermore, Ms Grehan contends that certain bank accounts and share trading accounts which appear to have been in the sole name of Mr Grehan were in fact jointly owned by both Ray Grehan and herself.

“Ms Grehan relies on these arguments to establish that the funds used to purchase the Hyde Park property were in fact owned beneficially by Ray Grehan and herself,” his statement went on.

Elsewhere in the statement, Mr Bartlett said Ms Grehan claimed she and her children were always “the beneficial owners of the Hyde Park” property and the funds used to buy it.

However, Mr Justice Eder, sitting in the queen’s bench of the High Court, ruled that Nama’s lawyers had been unacceptably slow in seeking a postponement of the October legal action.

He said Ms Grehan had failed to meet a court-imposed June disclosure deadline, but she did do so a month later, claiming her bank had refused to share some papers with her.

A month later again, solicitors Simmons Simmons, for Nama and the trustees, questioned the quality of the documents, but this delay was criticised by the judge as “unacceptable” and “lackadaisical” in modern litigation.

* This article was amended on September 14th, 2012, to correct a factual error.