The semi-state DAA hopped into bed with McNamara and Bank of Scotland (Ireland) in a scheme to extend and develop a business park at Cork Airport.
The property market collapsed soon after the scheme started. Brooklyn Property, the joint venture company co-owned by the DAA, Bank of Scotland (Ireland) and Bernard McNamara has borrowings of €22.5m.
This means the scheme is in massive negative equity as an €11m write-down has left the company's assets valued at just €14.5m. Auditor KPMG warned: "The valuation and recoverability of these assets is subject to significant uncertainty in light of current market conditions."
Around 70 per cent of the Brooklyn's income is going straight to Bank of Scotland (Ireland) to cover the bank loans. Company documents seen by the Sunday Independent show that Bank of Scotland extended its banking facilities by just 12 months, with existing agreements now due to expire in May 2013.
"The loss reflected in Brooklyn's 2011 accounts and the borrowings shown in the accounts are non-recourse to DAA," according to a spokesman for the semi-state.
"DAA's investment in Brooklyn, which owns the Cork Airport Business Park, has been positive for Cork, positive for employment and financially positive for DAA."
It is understood that a number of Irish and international investors have expressed interest in buying the business park, which has tenants including Amazon and GSK.
Last April, the Sunday Independent revealed that the DAA had exited a property partnership it had undertaken with developer Liam Carroll. The semi-state had been involved in a scheme which saw developers borrow €34m to build a business park near Dublin airport. Bank covenants were breached and frantic negotiations ensured a loan extension. Some €17m was written off the value of the development last year, according to the development company Turckton.