Sunday 21 December 2014

NAMA seeks €41.7m judgment against businessman, court hears

Published 28/07/2014 | 17:09

NAMA
NAMA

NAMA is seeking judgment for around €41.7m against businessman Bernard Costelloe arising out of loans for the purchase of two Dublin properties.

NAMA says Mr Costelloe, Greenfield  Road, Mount Merrion, Dublin,  and others connected with him, were advanced loans in 2006 and 2007 for the purchase and development of various properties, including the former "Dartmouth House" office building at One Grand Parade, Ranelagh, Dublin.

The bulk of the loans were made by Irish Nationwide Building Society for Dartmouth House while around €3m was given by Irish Bank Resolution Corporation (IBRC), formerly Anglo, for a property called "Hollyville", Carrickbrennan Road, Monkstown, Dublin.

NAMA later took over all the loans.

Mr Justice Peter Kelly refused an application from NAMA subsidiary, National Asset Loan Management (NALM) to fast-track the case to the Commercial Court because NAMA had rejected a business plan in March 2013 but had only inititated its proceedings this month.   

The case now remains in the ordinary High Court list.

In an affidavit, Roddy O'Neill, asset recovery manager with NAMA, said Mr Costelloe had a number of investments with now deceased developer Liam Maye. 

Mr Costelloe's indebtedness is managed by NAMA as part of a bundle of loans which are inter-related due to common borrowers or guarantors.

The overall indebtedness of Ms Costelloe to NAMA arising from loan facilities and guarantees in relation to his various investments with the late Liam Maye amounts to approximately €453m, Mr O'Neill said.

Mr Maye's widow, Anne Maye, as executrix of her husband's will, agreed to acquire Mr Costelloe's interests in certain assets he co-owned with her husband. 

She also agreed to indemnify Mr Costelloe for the Liam Maye debts and use her best endeavours to procure the release of him (Costelloe) from any liability for those debts, Mr O'Neill said.

While NAMA, after also acquiring the Maye debts, did not consent to the release of Mr Costelloe from his liabilities under those (Maye) debts, its case against Mr Costelloe only relates to the separate loans for the Dartmouth House and Monkstown properties, Mr O'Neill said.

NAMA's various dealings with Mr Costelloe began in late 2011 and each time he was asked to provide a debt reduction strategy, he referred to the indemnity given to him by Mrs Maye.

NAMA decided it would be necessary to reach an agreement with Mrs Maye in relation to the Maye debt which it did and, following mediation, she was replaced as executrix to her husband's will by corporate recovery expert Michael McAteer of Grant Thornton, Mr O'Neill said.

Throughout 2013, NAMA engaged on various occasions with Mr Costelloe but there was "no meaningful progress" as he continued to rely on Mrs Maye's indemnity, he said.

Mr Costelloe also wrote saying NAMA was bound by an oral agreement he made with two of its (NAMA's) officers in 2011 which limited the agency's recourse against him to his secured assets.  NAMA has not been given any evidence to substantiate this and maintains there is no substance to this assertion, Mr O'Neill said.

NAMA issued demands for immediate repayment of the Dartmouth House and Monkstown loans on July 2 last (2014).  

When they were not paid, NAMA appointed receivers on July 8 over the properties.

Mr O'Neill believes Mr Costelloe has no bona fide defence to the the claims and is seeking judgment for €41.7m against him.

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