McNamara can't pay €62m bill
Published 12/01/2010 | 05:00
ONE of the country's biggest developers has admitted he has no money to pay a €62.5m court judgment arising from the controversial €412m purchase of the Irish Glass Bottle (IGB) site.
The Commercial Court yesterday heard that Bernard McNamara is unable to meet the court order, issued last December, because he has "no unencumbered" or debt-free assets.
His company Donatex, which had been on the verge of being struck off the companies register for failure to file returns but is no longer on a strike-off list, also faces a €98m judgment arising out of the IGB site deal. Bought by a McNamara-led consortium for €412m in 2007, the IGB site is now valued at €65m, a writedown of almost 85pc.
The developer has revealed in a letter to lawyers acting for a group of Davy Stockbrokers' private clients who invested in the 2007 deal that "all of the equity" in his personal assets has been used to support various businesses in his property empire.
More than 1,100 are employed directly by Mr McNamara or earn a livelihood indirectly from his businesses, according to the Clare-born tycoon who has offered to pay €100,000 a month to the Davy investors pending an appeal to the Supreme Court.
Today Mr McNamara, who is separately suing the Dublin Docklands Development Authority (DDDA) -- one of his joint venture partners in the soured deal -- will find out if a stay will be imposed on what is the largest personal guarantee action to come before the Irish courts.
If a stay is not granted, the builder could be exposed to a raft of actions by other creditors including potential bankruptcy proceedings, the court heard.
High Court Judge Mr Justice Peter Kelly also raised the possibility that the Davy investors could be "deprived of their fruits of their judgment" if a stay was granted, allowing other creditors to move immediately against Mr McNamara.
"What if another creditor moves to bankruptcy," asked Judge Kelly who ruled last month that the investors, who include businessmen Martin Naughton and Lochlann Quinn, were entitled to the summary judgment orders because Mr McNamara and Donatex had advanced no arguable defence.
John Gleeson SC, for the investors, yesterday described the €100,000 a month offer as "paltry" given the sums owed by the former Fianna Fail county councillor.
Three years ago an information memorandum circulated to would-be investors boasted that the IGB deal offered the opportunity of "participating with one of the most prolific and successful developers in the country". The memo described Mr McNamara as a person "of significant net worth" but had cautioned there was no guarantee that he would remain so.
Mr Gleeson said that Mr McNamara was no longer a person of significant net work given his admission that he had no unencumbered assets.
The position of himself and his company was getting worse every day, he said, adding that the Davy investors were already down some €30m as Donatex had no asset other than the IGB site contract.
In a letter read to Judge Kelly, solicitors for Mr McNamara said Mr McNamara and Donatex "accept and acknowledge that they are unable to satisfy" the summary judgments pronounced in favour of the investors and added that Mr McNamara was not "at this time" able to make any substantial payment in satisfaction of the judgment against him.
The letter added that the investors would, however, benefit should Mr McNamara and Donatex win their court proceedings against the DDDA.
Martin Hayden SC, for Mr McNamara and Donatex, said, in seeking the postponement pending his client's Supreme Court appeal that if his clients won their case, any compensation paid to them by the DDDA would go to the investors.