NAMA wins its first court battle to recover millions
THE National Assets Management Agency (NAMA), in the first court application of its type, has secured multi-million summary judgment orders against three businessmen over unpaid loans to their companies by Bank of Ireland (BoI).
The orders are against businessman Patrick Shovlin and hoteliers Patrick and Anthony Fitzpatrick over loans including €280m to a company for the Beacon South Quarter development in Sandyford.
Mr Justice Peter Kelly queried why BoI had agreed to limit the businessmen's liability under guarantee for that amount to about 5pc of the sum due.
Summary judgment for some €38.5m was entered against Mr Shovlin and for around €22m each against the Fitzpatricks in favour of NAMA yesterday by Mr Justice Kelly at the Commercial Court.
When Ulster Bank immediately afterwards secured a €6.4m summary judgment order against Mr Shovlin, bringing total orders against him to almost €45m, and €3.27m summary judgment against both Fitzpatricks, bringing their total to more than €25m each, Mr Justice Kelly observed "it hasn't been a good day" for the three. The defendants did not defend any of the proceedings.
On the €280m Beacon Quarter loan, advanced from 2006, Mr Justice Kelly asked where was "the commercial logic" in BoI agreeing to limit the liability under guarantee to such an extent that there was no recourse to about 95pc of the debt due.
Rossa Fanning, BL for NAMA, said he didn't have an answer to that question but it appeared the bank's recourse was intended to be the assets of the company, the Beacon project, as the loans would have been advanced when the project was expected to yield better returns. While he doubted there was any reality to that expectation now, "we are where we are", counsel said.
Mr Fanning also stressed NAMA was not compromising its own entitlements as it had brought the proceedings suing for all that it was entitled to under the BoI contracts.
Counsel was moving the proceedings by a NAMA company, National Asset Loan Management Ltd, against Mr Shovlin, Turnberry, Kerrymount Avenue, Foxrock, Dublin; Patrick Fitzpatrick, Dargle Lodge, Cookstown Road, Enniskerry, Co Wicklow and Anthony Fitzpatrick, Amberley, Kerrymount Avenue, Foxrock.
NAMA brought the proceedings over guarantees provided by the three over loans by BoI, including a loan to part finance BoI's own headquarters at Baggot Street, Dublin 2, and loans for the Beacon development.
In the proceedings over the Beacon quarter loans, Mr Justice Kelly noted the bank had advanced €280m to a company, Landmark Enterprises Ltd, but had in contract documents reduced the defendants' liability under a guarantee of that facility to less than 5pc of the sum due. A receiver was appointed over the assets of Landmark last July.
NAMA also sought and secured summary judgment orders of €5.53m each against the same three defendants over their guarantees of unpaid loans provided to their company, Deileon Ltd, for refinancing of directors' loans and to finance a loan to Landmark Enterprises.