PROPERTY TRANSACTIONS:THERE WILL be many opportunities for solicitors arising out of the setting up of the National Assets Management Agency (Nama), according to a leading commercial property solicitor.
Mark Barr, a specialist in commercial property with Arthur Cox solicitors, told the annual Law Society conference at the weekend that solicitors would be needed to represent Nama itself, the participating institutions, borrowers, potential investors and banks in refinancing transactions.
Already a panel of solicitors had been set up to work on due diligence, and in the past two weeks Nama had published a tender for the appointment of a further panel to deal with enforcement.
It was up to solicitors to show their expertise in the Nama legislation to the participating institutions and the borrowers, he said. There would be joint ventures and partnerships involved in transactions involving Nama.
Nama would be around for seven to 10 years, he said, with the transfers of the assets from the institutions expected to be completed in 2011. It would then manage the assets and the loans.
The total loans taken into Nama were likely to be about €77 billion, of which 64 per cent would be in land and development and 36 per cent in associated loans.
Nama was not a voluntary creditor, and did not negotiate the loans, so it was given wide powers by the legislation, which imposed a very high level on disclosure on the institutions, he said.
Peter Murray, a specialist in banking with A&L Goodbody, said that the term “associated debtor” in the legislation was intended to capture persons and companies linked with the original debtor. Partnerships were very common in development in recent years, and if one person was brought into Nama the other could also be brought in, even if his or her loan was performing.
“Due diligence” would involve both financial inquiries and valuations on the one hand, and on the other legal inquiries to identify legal flaws, especially those that could not be cured by legislation.
“This will be an enormous logistical and operational exercise, given the size and complex nature of the assets,” he said.
He warned that the advantages afforded to Nama through the legislation would not work in jurisdictions like the UK, where a substantial number of assets existed. The legislation had no statutory effect there, and there was provision for the transfer of “the greatest interest possible”. This would need a case-by-case analysis.