Investors to test 'broke' builder's ability to repay
McNamara being pursued for €62.5m
Published 15/01/2010 | 05:00
AN elite group of private clients, found by Davy Stockbrokers to invest in the soured €412m purchase of the Irish Glass Bottle site, are expected to seek a court order compelling "broke" developer Bernard McNamara to disclose a full statement of his affairs (SOA).
The examination order, which would result in an assessment of his ability to repay a landmark €62.5m court-ordered debt, may be sought within days -- as the investors seek to satisfy their debt.
Mr McNamara, who admits he owes €1.5bn, has confirmed in legal proceedings that he had no unencumbered, or debt-free, assets.
However, industry sources last night said the investors were likely to discover a full SOA before considering a range of enforcement options available to them.
If Mr McNamara has any debt-free assets, the court move would allow Davy to place a charge or lien on them.
But the victory may be largely pyrrhic. If the banks had already staked a claim on Mr McNamara's assets, Davy would be placed second in the queue ahead of any other creditors.
For weeks, Mr McNamara battled to avoid registration of the €62.5m court-ordered debt -- arising from a personal guarantee he provided to private clients of Davy Stockbrokers who invested in the site, now valued at about €50m.
Earlier this week, the Commercial Court was told that Mr McNamara had conceded that he had "no unencumbered assets" and that all of the equity in his personal assets had been used to shore up his businesses.
He had offered to pay €100,000 per month off the summary judgment, but the offer was rejected as "paltry" by the investors.
Mr McNamara revealed that, in recent days, a settlement figure of €5m to €10m was being discussed between the parties, but no deal could be reached.
Within hours of the ruling, the Clare-born tycoon resigned from Michael McNamara & Company, the hugely successful construction firm he inherited from his father.
In an interview on RTE radio, he said that he was "broke" but insisted that Michael McNamara & Company was a legally separate and profitable entity unaffected by the High Court judgment.