Monday 22 May 2017

Survivors and victims of the slings and arrows of outrageous fortune

END OF A GOLDEN ERA: Sean Dunne and his wife Gayle Killilea are being pursued by Nama over expensive property investments in Switzerland and the US
END OF A GOLDEN ERA: Sean Dunne and his wife Gayle Killilea are being pursued by Nama over expensive property investments in Switzerland and the US

Roisin Burke looks back at 2012 and takes stock of some of the people who came out ahead on the balance sheet despite the financial crisis, and others who went under, in the year that was

WINNERS

Michael Hasenstab

ONE of the most successful bond traders in the world, Hasenstab's Franklin Templeton took an €8.5bn bet on Ireland, buying 10 per cent of Irish bonds.

He said backing Ireland's recovery is "probably one of the investments of the decade". In the immortal words of Mandy Rice Davies (in a rather different context): "Well, he would, wouldn't he?"

But Ireland's successful early steps in returning to the markets suggest Hasenstab and other bondholders who bought Irish bonds cheap might well be on to something.

Stan McCarthy

Despite the rather horrible consumer climate, the Kerry Group boss has seen the €7bn market cap food multinational outperform expectations this year. Profits to date in 2012 are up 14 per cent to €209m and shares soared more than 30 per cent.

The soft-spoken Kerry native has been with the company since joining as a graduate in 1976 and seems to have all the right ingredients for success.

Larry Goodman

Seeing off a dozen other chasers, including American and Singapore investment fund titans, the 75-year-old pensioner beef baron bought the landmark Bank of Ireland's HQ on Baggot Street for €43m, down from its €200m-plus Celtic Tiger price. A snip.

The Collison brothers

Lately name-checked on Forbes' 30 under 30 innovators and entrepreneurs' list, young Limerick brothers Patrick and John Collison have been rapidly growing their San Francisco-based payments start-up, Stripe.

Tipped to be worth upwards of €500m and backed by Paypal founders Elon Musk and Peter Theil as well as other Silicon Valley heavyweights like Ron Conway, significant expansion outside the US is the plan in 2013.

Barely in their 20s, they're already millionaires following the €3m sale of a previous venture.

Insolvency hired guns

It's an ill wind that doesn't blow someone some gravy. Tidying up when businesses have gone splat pays receivers and liquidators mucho dinero.

Top insolvency experts earn circa €250-€400 an hour, their teams netting six-figure sums in fees in some big jobs.

Top pros like Declan Taite (Ritz Carlton), Kieran Wallace (Bloxham's and CHC) and Michael McAteer (Eircom examinership) have been busy this year.

Bankers

At least we're all in this together, aren't we lads? Austerity or no austerity, being a top banker still pays big.

Bank of Ireland's boss, Richie Boucher, in situ at a high level in the state-rescued institution since before it collapsed, earns €831,000. Although his bank had to get a colossal multibillion euro debt writedown from the rest of us, Boucher recently warned battling homeowners that no such relief would be countenanced for them.

And it emerged recently that 24 other execs at Boucher's bank have salaries above €400,000. Seven execs at Mike Aynsley's IBRC have remuneration of over €500,000.

At AIB, which cost the State €20bn, just two senior figures earn above €400,000. It has introduced salary cuts for senior staff but it still has lots of well-paid bankers. It has complained about the €500,000 pay cap, even warning that it was a risk to its business.

Some 160 retired bankers from bailed-out institutions are raking in pensions of more than €100,000.

Cove Energy

Irish exploration pioneers John Craven and Michael Nolan led the €1.2bn sale of Mozambique oil and gas explorer Cove to Thai giant PTT mid-year.

It left Craven and Nolan sharing a nice little €45m

earner based on their company stakes. The two are now involved in interesting AIM-listed explorer Fastnet along with Raglan Capital's Cathal Friel.

Gerry Barry, Fintrax

No less than 10 bidders battled in final-stage attempts to buy Galway man Gerry Barry's VAT-back company Fintrax. Exponent bagged it for €170m. Barry started the business back in the Eighties, and he and his family were majority shareholders.

Padraig McManus

The ex-ESB boss has just landed a job as the new chairman of Eircom. At ESB, McManus benefited from one of the last of the semi-State mega packages, before the salary cap. McManus retired this year on a final package of €800,000.

Possibly the highest ever paid boss in the semi-State sector, the 60-year-old is also entitled to half-price electricity in his retirement. His salary on departure was over €400,000 but at one point his annual pay with bonus hit €752,568.

OpenHydro's founders

French nuclear submarine-maker DCNX is set to take over Louth-based ocean energy business OpenHydro, buying up a controlling share in the business.

Based on a valuation of €175m, founders Brendan Gilmore and Donal O'Flynn could be quids in for around €35m and €17m respectively, and stakeholder One51 should also get a circa €16m chunk.

Herb Hribar

Eircom came back from the almost-dead, emerging from examinership in June. Hribar, appointed CEO in August, inherited a company with an almost halved debt burden and a restructured balance sheet.

He's experienced: 30 years in the industry includes spells running a leading European cable company and a top US wireless firm. But Eircom still has a €2bn debt mountain and must cut 2,000 staff. Time will tell if he can make it work.



LOSERS

CIE bosses

Mid-year, CIE almost went broke. The €242m-subsidised state transport company had almost maxed out its overdraft and was left begging for a €36m rescue.

It delayed publishing its accounts while it struggled to sort out the financial crisis. Its auditors warned when accounts finally emerged that its status as a going concern was at risk.

Yet its chairwoman Vivienne Jupp and six-figure earning chief executives Dick Fearn (Irish Rail), Paddy Doherty (Dublin Bus), and Martin Nolan (Bus Eireann) appear to have little public to say about the matter and what they are doing to improve it.

Martin Birrane

The Mayo millionaire's racecar maker Lola Cars International went into administration with €28m debts in May after over 40 years in existence. A new buyer couldn't be found.

Castlebeck

Some of Ireland's richest men were embarrassed by a major patient abuse scandal in Britain.

Following a Panorama television expose, a UK inquiry found that dozens of patients were ill-treated at a private hospital owned by care group Castlebeck. Castlebeck was owned by Lydian Partners, a Swiss fund set up by former Kerry Group boss Denis Brosnan, where JP McManus and John Magnier had made an arm's length investment.

Eleven former members of staff pleaded guilty to mistreatments of patients with learning disabilities at the €3,500-a-week Winterbourne facility, and a serious case review said it put profit before humane treatment.

Bankrupt builders and bookies

They're losers, but in a way they're also winners in the scheme of things. They get to go on with their lives, while the Exchequer is left with shortfalls on millions of debt wiped clean.

Britain has become for bankruptcy-hunting Irish builders what Las Vegas is for quickie marriage-seeking couples.

One of Nama's formerly most indebted developers, Clare man Bernard McNamara, was declared bankrupt in London in November, having owed €1.5bn.

Beacon Quarter developer Paddy Shovlin also used the British system to shed his debt. As did the Glenamaddy builder brothers Ray and Danny Grehan, who owed the taxpayer €300m via Nama.

Ex-bookie and broadcaster Ivan Yates went to Wales and was granted bankruptcy there in September, leaving state bank AIB down the €3.7m that it says it was owed by the former Fine Gael TD.

Johnny Ronan and Richard Barrett

The seasoned investment duo battled against it with all their might, but liquidators were finally appointed to Barrett and Ronan's Treasury Holdings in October.

Assets worth €270m, including the Stillorgan Shopping Centre in Dublin and Merchant's Quay in Cork, are likely to be sold off, with international distressed asset buyers like Kennedy Wilson and Apollo said to be interested in acquiring developments.

Battersea Powerstation, a prime British asset controlled by one of the pair's companies and bought for €600m, was sold off by administrators in January.

Treasury's liquidators are considering an action against Barrett and Ronan related to a €20m transaction connected with an Asian company.

The Quinns

No one has fought their corner harder than broke former billionaire Sean Quinn and his family.

This was the year that the formidable daughters Aoife, Colette and Ciara came out fighting, appearing on TV and in the press to defend their father and the family.

As well they might: the family's former international property empire was worth a hell of a lot to them, it emerged in court in October.

Family members were to receive millions in severance payments, a court was told. Documents retrieved from a damaged computer in Moscow contained employment contracts for Sean Jnr's wife Karen and the Quinn daughters, stipulating that they get millions of euro in the event of being let go by property companies in Russia over which the former Anglo bank IBRC claims to have charges of up to €500m.

Sean Quinn Snr was to get up to €15m, his wife €36m. Cousin Peter 'Petey' Darragh Quinn was in line to get €26.6m, it is claimed.

In January, family members face being cross-examined on details of their accounts and assets by IBRC lawyers. Sean Quinn Jnr, Karen Woods, daughters Ciara, Colette, Aoife and Brenda and Ciara's husband Niall McPartland will have to take the stand, a court has ruled.

Derek Quinlan

Once nicknamed King Midas for his ability to turn investments golden, Derek Quinlan seems reduced to being bankrolled by the Barclay brothers, who lent him over €1m to "get back on his feet", a London court heard this year, and who also supplied a €500,000 loan to pay his Swiss tax bill.

Last month, the former taxman and a partner lost control of a Madrid office block with a €2.65bn rent roll over 30 years.

Willie Walsh

While IAG, where ex-pilot and former Aer Lingus chief Willie Walsh is CEO, was profitable, he's seen those profits obliterated by €262m losses this year

at IAG-owned Iberia, which is pretty much burning money faster than airplane fuel.

Next year, heralds a battle royale with seasoned strikers at Iberia, where he wants to cut 4,500 jobs. He's done a similar job successfully at BA but it was a bitter fight. This year will be interesting.

Meanwhile, he's bet Richard Branson "a kick in the groin" that the billionaire's Virgin Atlantic airline won't survive five years.

The O'Donnells

Their company once owned a big trophy building down the road from the White House in Washington and other choice commercial real estate in the City of London and in Stockholm. Vico Capital duo Brian O'Donnell and his wife Mary Pat were Bank of Ireland's darlings in the boom, passionately courted for investment threesomes, O'Donnell says. That love affair is long over.

The couple want to prove their business interests lie in London so they can go bankrupt there like a long line of other Celtic Tiger economic refugees. Bank of Ireland is contesting this, as well as the putting in trust of assets to the O'Donnell children.

Sean Dunne

The US resident developer lost control of several Irish hotel properties to his bankers at the start of the year. The former Jurys and Berkeley Court hotels were handed over and €259m in personal guarantees called in. They had been rented back to Dunne's D4 Hotels business.

Legal rows with Nama have abounded, with the toxic bank claiming Dunner's wife Gayle didn't have the means to pay for expensive property investments in the US and Switzerland. Dunne says Nama has it all wrong but the state property agency is still pursuing the Dunnes through a US lawsuit over these dealings.

Westlife's Shane Filan

Just ahead of a major Westlife farewell tour, the Sligo popstar was declared bankrupt in a Surrey court in Britain after crushing losses suffered by his property development company, Shafin, in which he was involved with his brother.

Seamus Fitzpatrick's CapVest

Sometimes it seems as if the Germans are taking over everything. Cavan native Seamus Fitzpatrick's CapVest, which owns the majority of biscuits and beans company Valeo foods, was considered to be ahead of the posse bidding for KP Snacks.

However, German group Intersnack swooped and gobbled up the Hula Hoop-making business in the final round of bidding, with a €614m deal.

Sunday Independent

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