Sunday 24 September 2017

NAMA sues Treasury over shares transfer from firm

Tim Healy

'Bad bank' claims there was no justification for €20m transaction

TREASURY Holdings and its owners Richard Barrett and John Ronan are being sued by NAMA in a bid to reverse a controversial transaction where €20m in shares were allegedly transferred out of the group to the benefit of the two men in return for €100,000 in cash and unsecured loan notes.

NAMA, which acquired some €1bn of Treasury's €2.7bn loans in April and May 2011 after the disputed transaction of March 22, 2010, claims there was no commercially valid reason for that transaction made when Treasury was either insolvent or in very difficult financial circumstances.

The transaction was for "a significant undervalue", impaired the rights and interests of NAMA as the major creditor of Treasury and was made with the intention of defrauding bank and/or other creditors of Treasury, it alleges.

In entering into the transaction, Mr Barrett and Mr Ronan failed to act in the best interests of Treasury and/or its creditors, breached their fiduciary duty to the company and creditors and breached the NAMA Act, it is claimed.

Last night a spokesman for Treasury said the matter could have been resolved "without the drama, publicity and cost of yet another visit to the Four Courts".

Reverse

Treasury Holdings said it had previously agreed to reverse the effects of the "Tail" deal, and that the company, along with Mr Barrett and Mr Ronan, was willing to go to mediation with NAMA to resolve the issue.

In an affidavit, John Bruder, managing director of Treasury, said the TAIL transaction was not illegal and that there was a valid commercial reason for it. He also argued NAMA's handling of Treasury's efforts to sell the group's NAMA loans had damaged efforts to reach agreement on the TAIL issue.

The proceedings are the latest in a string of cases taken by Treasury against NAMA, and by NAMA against the company. The latest case was transferred to the Commercial Court yesterday by Mr Justice Peter Kelly on the application of Paul Sreenan, for NAMA.

Mr Sreenan indicated there was no point to mediation as NAMA was not prepared to accept less than reversal of the TAIL transaction.

The judge said he would not direct the parties to consider mediation in those circumstances. He approved a schedule and returned the matter for mention in October.

The case relates to the March 22, 2010, TAIL transaction where some €20m in shares in China Real Estate Opportunities (CREO) were transferred by three Treasury subsidiaries into another wholly owned Treasury subsidiary, Daylasian, for unsecured 10-year loan notes with a face value of some €18.4m.

NAMA claims the economic effect of that transaction alone on Treasury was neutral as the loan note instrument represented an inter-company debt and the CREO shares remained beneficially owned by Treasury.

However, NAMA claims, on the same date, the defendants caused Treasury to transfer its interest in Daylasian to Mr Barrett and Mr Ronan for €100,000 leaving Treasury with an unsecured loan note instrument from what was no longer a group company.

Daylasian changed its name to Treasury Asian Investments Ltd (TAIL) on April 22, 2010.

Irish Independent

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