UK bankruptcy law allows Ireland's top-spending builder to start again . . . 'probably on the other side of the world'
THE developer who set the record for land prices during the boom – €84m an acre in Dublin's Ballsbridge – today walks away from debts of €300m, having applied for bankruptcy in London exactly one year ago.
And while former Glenkerrin Homes chief Ray Grehan may find himself restricted from being a director in the UK and possibly Ireland for several years to come, following his automatic discharge from bankruptcy today, the Galway-born businessman is already understood to be making plans to start afresh and debt-free on the "far side of the world" according to a source familiar with the matter.
Mr Grehan first hit the headlines in spectacular fashion in 2005, when he splashed out a massive €171.5m for the former Veterinary College site in Dublin at the height of the so-called 'Battle of Ballsbridge' in which he and several other high-profile developers, including Sean Dunne and Bernard McNamara, engaged in a frenzied bidding war to secure control of Ireland's most valuable real estate. But while the price of land in Dublin 4 continued to climb, the decline of the wider economy was already taking hold by the time Mr Grehan's plans for the former UCD site were coming to fruition.
The banking crisis, both here and internationally, plus the onset of recession put paid to the Glenkerrin Homes chief's Dublin 4 dream.
The reversal in Mr Grehan's fortune was completed in November 2011 with Nama applying for and obtaining a €300m judgement against him in the Commercial Court.
That judgement proved to be the final straw for the developer. Having already struggled to agree a business plan with Nama, he moved within weeks to avail of the UK's more benign bankruptcy regime, which typically lasts just 12 months as opposed to the 12 years still being imposed under Ireland's draconian system.
Speaking to the Sunday Independent last January just days after he had been declared bankrupt in London, Mr Grehan said: "By doing this [declaring bankruptcy], maybe it will free me up from that and leave me in a better position to rebuild than staying on and allowing Nama to prolong that agony with a noose around my neck over the next several years."
While Mr Grehan declined to make any comment on his emergence from bankruptcy when contacted by this newspaper last night, it is understood that he is now no longer personally liable for the €300m debt owed to Nama – his biggest single creditor.
Apart from the so-called 'bad bank', it is understood that Mr Grehan had smaller debts with both Bank of Ireland and Bank of Scotland, which will be wiped out with his automatic dis- charge from bankruptcy today.
Not that the Kilkerrin native will be completely free from having any future dealings with Nama. Indeed, the Sunday Independent understands the developer is still tied up in litigation with the agency in relation to the ownership of a number of residential properties, including an apartment in London's exclusive One Hyde Park, which he insists is owned by a family trust as opposed to him personally.
Notwithstanding Mr Grehan's decision to declare bankruptcy in the UK, Nama has determined to secure the recovery of as much of the €300m for which it obtained judgement by taking control of any assets he might have, regardless of their location.
To this end, the agency secured a worldwide freezing order in December 2011 preventing Mr Grehan from selling any assets anywhere in the world.