Saturday 29 November 2014

NAMA seeks €77m orders against Harry Crosbie

Tim Healy

Published 31/03/2014 | 15:15

Harry Crosbie
Harry Crosbie

THE National Assets Management Agency is seeking €77m judgment orders against businessman Harry Crosbie arising from personal loans and his personal guarantees of the liabilities of two companies.

The agency, which in 2010 took over AIB loans of Mr Crosbie and his companies, is not seeking judgment against Mr Crosbie concerning other sums due under a separate €353m facility for development of the Point Village. Recourse for the €353m is limited to assets provided as security, plus an additional personal recourse amount, it noted.

 

"Significant" sums realised from security granted by Mr Crosbie have been applied to reduce his debts under the Point Village loans, including some €27m from sale of his shareholding in Amphitheatre Ireland Ltd, the agency said.

 

Michael McDowell SC, for Mr Crosbie, told Mr Justice Peter Kelly today he would be opposing the application for the €77m summary judgment  orders. Despite having "pocketed" some €35m following an agreement concerning sale of assets, NAMA was now seeking to resile from aspects of that agreement, counsel argued.

 

In its action, NAMA alleges it initially refrained from enforcement action over the debts of Mr Crosbie and connected companies - referred to as the Connection - and instead had in good faith worked with the Connection in its efforts to complete the Point Village and deal with the debts.

 

However, it alleged, there was a failure by Mr Crosbie to make full and frank disclosure concerning his assets and liabilities before the sides had entered into a Memorandum of Understanding in early 2012 setting out the commercial terms for co-operation between them. 

 

Because of the deficit between the debt and the value of the secured asets, any consensual strategy had to be based on Mr Crosbie granting additional security over his unencumbered assets, the agency said. Due to the alleged failure to make full disclosure related to those assets, NAMA said it was obliged to terminate the MOU in August 2012.

 

NAMA said it gave the Connection another opportunity after that date to reduce its debts through agreements for disposal of secured assets but became increasingly concerned during 2012 and 2013 about the effectiveness of Mr Crosbie's day to day management of the assets. It later decided the assets would be better managed by receivers and appointed receivers in April 2013.

 

Having been told today Mr Crosbie was not objecting to the case being fast-tracked in the Commercial Court, Mr Justice Kelly granted the application by Paul Sreenan SC, for NAMA, to transfer the proceedings to that court's list, made directions for exchange of legal documents and fixed the summary judgment application for hearing on May 14th.

 

The judge noted the court had received a memorandum of understanding and a statement of affairs which the sides had agreed were to remain confidential for reasons of commercial sensitivity. 

 

In its judgment application, NAMA claims some €77m was due on February 16th last under personal loan facilities granted to Mr Crosbie in May 2011 by Allied Irish Banks and under his personal guarantees concerning some of the liabilities of Shoal Trading Ltd and Ossory Park Management Ltd (OPML). 

 

NAMA appointed receivers in April 2013 on foot of an unmet demand for repayment under the loans and guarantees. Last month, NAMA served a further demand on Mr Crosbie seeking payment by March 17th last of the total sum of €77,095,090 being the aggregate sums owed by him. When payment was not made, the legal proceedings were initiated.

 

In correspondence with NAMA, solicitors for Mr Crosbie said he had concluded a "solemn" agreement with NAMA in August 2012 but, since then, "for reasons known only to you", NAMA repeatedly denied any such agreement. In light of that alleged agreement, the solicitors said they could not see how NAMA could issue its latest demand which would be "vigorously defended to the fullest extent".

 

In reply, NAMA's lawyers said it's position on the "purported agreement" had been fully set out and it was fully entitled to demand repayment and to proceed to seek judgment.  Mr Crosbie had been given full credit, against his debts under the Point Village loan facilities,  for all net realisations in the receivership, it added.

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