THE NATIONAL Asset Management Agency (Nama) has told the Supreme Court it will make a formal decision within two weeks on whether or not to acquire some €2.1 billion loans to companies of property investor Paddy McKillen.
A number of loans owing from other parties are “in suspense” due to the McKillen action aimed at halting acquisition of his loans, the court heard.
This relates to about €3 billion in loans due from between 30 and 40 other borrowers, according to a source close to Nama. The loans averaged between €20 million and €50 million each and were due from debtors who were not among the most indebted borrowers.
The transfer of these loans to Nama has been delayed pending an outcome in the McKillen case.
There were issues around the eligibility of these loans – one of the objections made by Mr McKillen in his action against the agency.
Irrespective of the forthcoming Nama decision on the loans – necessitated by the Supreme Court finding last week that Nama had never made any lawful decision to acquire them – the seven-judge court said it will proceed to rule on two other issues raised by Mr McKillen which are central to the work of Nama. No date for that ruling was given.
In a letter of February 7th last read to the court, Chief State Solicitor David O’Hagan said the State believed those other issues, if left unresolved, would mean “serious ongoing uncertainty as to the status and powers of Nama”.
The first issue is whether a right to fair procedures applies to persons whose loans Nama proposes to acquire on the basis such acquisition interferes with their constitutional rights. The second issue raised concerns the constitutionality of the Nama legislation.
Mr Justice John Murray said the court considered the issues and would reserve judgment. Nama’s pending decision on the McKillen loans provided no proper basis on which to adjourn consideration of those two issues, he said.
Because of its finding no lawful decision was made by Nama to acquire the loans. The court had asked the parties to consider whether other issues arising from that purported decision were justiciable or should be decided.
Yesterday, Michael Cush for Mr McKillen, said his side was surprised Nama was asking the court to wait until it decides whether to acquire the loans before considering whether the other issues should be ruled upon. Nama also proposed to decide whether or not to acquire the loans by reference to all the material before the courts by both sides in the case.
Maurice Collins SC, for Nama, said it proposed to make a new decision on the loans acquisition as it was statutorily bound to do.
