Treasury Holdings has been given leave to seek a judicial review of Nama's decision to call in its loans and appoint a receiver to various assets.
The group has overall debt of some €2.7 billion and Nama acquired some €1.7 billion of its loans in 2010.
While granting leave today to Treasury to bring the case, Ms Justice Mary Finlay Geoghegan stressed she was not expressing any definite view on the legal and factual issues raised by the group, other than that it had met the necessary threshold of raising "substantial" issues to be tried.
She found Treasury had raised substantial grounds including whether Nama had breached its duty to notify Treasury of the decision of December 8th 2011 proposing the loans would be called in and whether it gave it an opportunity to be heard prior to the decision being taken.
She also found Treasury had made out a substantial case whether Nama exercised its discretionary powers in a fair and reasonable manner in calling in the loans without taking into account relevant considerations, including the availability of investors/purchasers for the Treasury loans.
Treasury had claimed Nama failed to properly consider proposals from MacQuarie Corporate and Asset Finance Ltd and Hines. Treasury said Macquarie had offered a "generous" purchase price of €622m for its loan portfolio while another "more complex" bid from Hines offered "a potential total return" to Nama and the Spencer Dock banking syndicate of some €600m. It also claimed there were indications from both parties their bids might be improved upon.
Nama contended neither proposal involved actual "investment" in Treasury but rather required the agency to provide the bulk of the finance for Macquarie and Hines to acquire the Nama loans.
The agency had argued, following reviews by itself and PricewaterhouseCoooper, the proposals were not in the interest of either Nama or the public but would benefit Treasury's management and shareholders by about €80m over a period of years, plus annual management fees of several million.
The proposals would require the agency to finance the loan purchase via deferred consideration for the loans with relatively small upfront cash payments by both Macquarie and Hines, Nama said. Under both proposals, the proposed consideration was significantly less than the debt owing to Nama, it added.
Treasury also secured leave today to raise issues as to whether Nama failed to give it a proper opportunity to address the agency's concerns about the strategy advanced by Treasury to deal with its trade creditors and with tax issues.
The judge found Treasury had not made out a substantial case that Nama had acted for an improper purpose or in bad faith.
She also granted Nama liberty to apply to seek security for costs and/or an undertaking for damages from Treasury related to the proposed judicial review.
Paul Sreenan SC, for Nama, said his side would consider those matters prior to the case being mentioned again next Tuesday.
The judge has adjourned that issue and all other outstanding matters to Tuesday. Under the Nama Act, the court will also have to measure the legal costs of the six-day leave application, expected to be very substantial.
It is expected an application will be made to have the full hearing of the judicial review proceedings fast-tracked by the Commercial Court with both sides indicating they regarded the matter as urgent.
Leave for judicial review was sought by Treasury Holdings and 22 related companies following Nama's decisions last December and January to call in its loans and appoint joint receivers.
In opposing the leave application, Nama contended it had engaged extensively with Treasury and was entitled to act as it did on grounds including Treasury's insolvency and failure to advance acceptable creditor and tax strategies or workable investment proposals.
KBC Bank, owed €75m by Treasury, also opposed leave, and said it had lost faith in the management of Treasury and would countenance no alternative to the calling in of Treasury's loans and appointment of receivers.
