Waiting game to assess real worth of developer
IT IS the largest personal guarantee action in the history of the State. And with almost €63m at stake it is no surprise that developer Bernard McNamara is to appeal yesterday's victory by private clients of Davy Stockbrokers over the €412m soured Irish Glass Bottle site.
Normally when a judgment is entered against a defendant in Ireland's fast-track Commercial Court, the judgment takes immediate effect in the form of a court order even if a stay of execution is granted in the event of an appeal.
Or a miracle.
But the formal drawing up of that order has been deferred until early next year to facilitate an appeal by McNamara.
The deferral on the making of the order has also been granted to allow Davy's clients, who allegedly include banker Lochlainn Quinn and educational software millionaire Barry O'Callaghan, to bring evidence before the courts of a serious deterioration in McNamara's financial position.
A deterioration, no doubt, that could weigh heavily in the investors' minds as they seek to recoup their massive losses.
The investors availed of the opportunity described in a private information memorandum to "participate with one of the most prolific and successful developers in the country in the development of the largest and most high profile property to become available in Dublin 4 for decades".
They were also advised: "Although we understand that Bernard McNamara is currently of significant net worth, there is no guarantee that will be the case should the guarantee ever be called upon".
When the courts re-convene after the Christmas recess, we may have a clearer picture of just how much Bernard McNamara's net worth has depreciated when the Davy investors adduce evidence of his alleged financial deterioration.
But his own lawyers have conceded troubles ahead.
Yesterday they warned the Commercial Court that if the judgment is entered onto the court record, it could trigger a knock-on effect "across the board" and could give rise to potential consequences on [other] security documents.
In layman's terms, if there is a €62.5m court judgment entered against McNamara, it could trigger a stampede by other creditors to protect their positions.
- Dearbhail McDonald Legal Editor
Irish Independent
