Irish News

Tuesday 29 July 2014

Treasury sues Nama for record €5bn - we pay the bill if they win

DANIEL McCONNELL Chief Reporter

Published 06/05/2012|05:00

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Battersea Power Station
TREASURE TROVE: Developers Johnny Ronan and Richard Barrett's company's case centres on Battersea Power Station, for which Chelsea FC has made a bid

Taxpayers are facing the biggest damages claim in the history of the State -- up to €5bn -- in a landmark case being taken by Treasury Holdings against Nama.

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In High Court documents, Treasury claims that Nama effectively misled developers Johnny Ronan and Richard Barrett over Nama's intention to take over the company late last year.

Nama is being sued by Treasury arising out of the appointment of receivers to the property company -- the so-called 'bad bank' is also facing a constitutional challenge to special powers granted in governing legislation.

An explosive 23-page sworn affidavit, seen by the Sunday Independent, was sent by Treasury managing director John Bruder to Nama last Friday.

Yesterday Nama said it would robustly defend its position: "In respect of the actions being taken against Nama, the agency strongly maintains that there is no basis to these claims and we will fully defend our position.

"On the constitutionality of the Nama Act, which was enacted by the Oireachtas, the defence of any claims on this issue is a matter for the Attorney General," a spokesman said.

Mr Bruder claims that not only was Treasury given insufficient notice that Nama was to move against it, but Nama said it was prepared to work with the developer at a time when enforcement proceedings were being readied between October and December last year.

"[Treasury] was given the strong impression that Nama was prepared to continue working with Treasury and to agree term sheets, whereas in fact it. . . was already considering enforcement," Mr Bruder's affidavit said.

"The fact that both Nama and KBC Bank had approved an enforcement strategy as against Treasury is something that was never made known to Treasury at all -- still less were they given an opportunity to make any representations in relation to same," the affidavit added.

Mr Bruder also accused Nama of placing great strain on Treasury's financial position by "not releasing working capital it had undertaken to provide" in a memorandum of understanding on December 13, 2011.

Given the decision not to release the working capital as promised, Treasury had to meet the cost of running many of its properties in its portfolio from its "own unencumbered cash resources".

Nama's enforcement has also placed a number of jobs at the company in jeopardy, it has been claimed.

Mr Bruder also referred to a letter from Nama, dated November 11, 2011, which he said made no reference to the decision by the board taken the previous day to "proposed enforcement".

Sunday Independent

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