Married developers considering sham separations to protect cash
Ex-wives come before creditor banks when assets divided, conference told
MARRIED developers whose assets have been transferred to NAMA are enquiring about the benefits of phoney separations to protect their former lifestyles.
Enquiries about "phoney separations" have increased because separating NAMA wives have a better chance of protecting their once lucrative lifestyles than those still happily married. The details emerged at a legal conference to debate the impact of the toxic loans agency.
It has emerged that wives of developers are, in separation proceedings, "super creditors" whose interests rank above those of NAMA and other creditors such as banks.
This has prompted a small number of developers to ask about "phoney separations" to protect assets such as homes and shares, according to some senior counsels who attended the conference in the capital, organised by publishing group Roundhall Thomson Reuters.
Late last year the High Court approved the transfer of a €4.4m home -- valued at €3.3m after it was taken out of a trust -- together with an annual maintenance of €60,000, to a NAMA wife who is separated from her husband.
The identities of all of the parties cannot be revealed, under the "in camera" rule governing privacy in family law matters.
The husband's company is being paid €700,000 a year by NAMA to manage his assets, once valued at up to €2bn, but who has debts of €2.3bn.
Despite her husband's insolvency, the wife was allowed "substantial" assets and she defeated the bank's claims over her husband's assets.
The provision for the wife's living expenses was made despite the "overall astonishing levels of insolvency of the family as a whole", according to family law expert and barrister Ann Fitzgerald who addressed the NAMA conference.
"Can it be argued that, by Irish standards, the provision of a house worth €3.3m is a 'necessity'," Ms Fitzgerald asked.
"With this finding, do we now have rich poor people as well as poor poor people and a different law applying to each?"
NAMA, which has the power to reverse any property transfers to developers' wives if it believes it was designed to deprive other creditors or put assets beyond reach, currently has no right to be heard in family law cases which are protected by the 'in camera' (privacy) rule.
However, banks are fighting to be heard in the family law courts and have been invited to make legal submissions in a long-running family law case involving a husband with "enormous debts".
The man has been prevented by the courts from reducing his assets below a certain level.