Wednesday 28 September 2016

NI First Minister Peter Robinson received assurances from Cerberus on treatment of NAMA borrowers

Published 07/10/2015 | 11:12

Peter Robinson
Peter Robinson

US vulture fund Cerberus provided the North’s First Minister Peter Robinson with an assurance that Nama borrowers would be released from personal guarantees.

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The fund said “debt forgiveness” was also on the table for cooperating borrowers.

The pledges were revealed in a letter to Mr Robinson just days before the firm bought Nama’s northern loan portfolio, Project Eagle, for €1.6bn.

A copy of the letter was supplied by Cerberus to the Stormont inquiry into the deal, which has been dogged by allegations of intended kickback payments to politicians and business figures.

Among those alleged to have been in line for a payment was Mr Robinson, an accusation firmly denied by the First Minister.

Cerberus has also denied making any inappropriate payments.

The letter was sent to Mr Robinson a day before he held a meeting with former US Vice President Dan Quayle, who is now a senior figure with Cerberus, on March 25, 2014.

It was not copied to the North’s Deputy First Minister, Martin McGuinness, who has said he was unaware of the meeting with Mr Quayle.

Cerberus was selected by Nama as the wining bidder for the portfolio the following month.

The letter said: “Cerberus will release personal and corporate guarantees as a key part of consensual workout plans with corporate borrowers.”

It also pledged to provide incentives to borrowers, including paying them asset management fees, leasing fees, development fees and, if appropriate, profit sharing structures in the event assets are sold for a good profit.

“We would be willing to waive guarantees for cooperative borrowers who agree to execute a consensual workout plan.

“Assuming the applicable borrowers cooperate in good faith in connection with such a workout plan and their agreement regarding a consensual restructuring transaction, any and all contingent liabilities and/or personal guarantees from borrowers would then be released in accordance with the terms of the plan.

“Consequently, only the assets which are the principal subject of collateral for the underlying debt would be retained as security.

“The existing guarantees would be released so they would no longer be an impediment to borrowers or grantors from undertaking new business ventures.”

The letter was provided by Cerberus to its legal advisors Brown Rudnick on March 24, 2014 and was passed on to Mr Robinson ahead of a meeting between him and Mr Quayle the following day.

The meeting was also attended by one of Mr Robinson’s special advisors, the North’s then finance minister, Simon Hamilton, and Ian Coulter, the then managing partner of Belfast law firm Tughans.

The letter stated that Cerberus was hopeful its asset management strategies would start to rebuild the quality of the property assets underpinning the loans.

“As a result it is anticipated that over the long term this investment strategy is likely to be a substantial contributor to local and regional property markets in Northern Ireland,” it said.

It committed Cerberus to using local advisors, contractors and suppliers and said it intended, if appropriate, to open a branch of its European operation in Belfast, employing “qualified property and loan professionals based in and originating from Northern Ireland”.

Mr Robinson’s office had previously secured similar assurances from another bidder, investment firm Pimco, of favourable treatment for Nama debtors. However, Pimco pulled out of the bidding process.

Following the completion of the deal, a Stg£7.5m success fee paid to Tughans, who acted as Brown Rudnick’s local advisors, was diverted by Mr Coulter to an account in the Isle of Man.

Mr Coulter subsequently left the law firm and the matter was referred to the Law Society of Northern Ireland, which launched an investigation.

The transaction is also being investigated by the UK’s National Crime Agency, while the US Securities and Exchange Commission has also made inquiries about the Project Eagle deal.

Political blogger Jamie Bryson alleged that Mr Robinson, Mr Coulter, former Nama advisor Frank Cushnahan, accountant David Watters and developer Andrew Creighton has been in line to receive the money.

This has been denied by Mr Robinson.

Mr Coulter has denied any wrongdoing and said the transactions took place for complex and commercially sensitive reasons which he would explain to the appropriate authorities.

Mr Cushnahan has denied any wrongdoing.

Mr Creighton said he had made no claim for a fee and did not expect to receive one in relation to Project Eagle.

A draft letter written by Mr Watters showed he had an expectation of receiving the Stg£7.5m fee and that he believed he had come up with the original concept for the sell off of the northern loans portfolio.

However, he had declined to comment on the draft letter, which came into the public domain this week.

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