KBC to seek Treasury wind-up unless €20m repaid this month
KBC Bank has served notice it will seek to wind up troubled developer Treasury Holdings if €20m is not repaid later this month under the company's guarantee of loans which remain unpaid, the Commercial Court heard yesterday.
NAMA has also issued repayment demands to Treasury founders Richard Barret and John Ronan for some €3m each arising from guarantees of a €13.5m loan to Treasury.
The demands were issued by KBC and NAMA within the last few days, prior to the hearing of the developer's legal challenge aimed at overturning NAMA's decision calling in €1bn loans and appointing receivers over its properties here.
The Treasury group, the court previously noted, is insolvent, with overall debt of some €2.7 billion. NAMA acquired some €1.7bn of those loans in 2010 and the loans called in amount to over €1bn.
Opening its challenge yesterday, Michael Cush counsel for Treasury, said it only recently learned from NAMA of recommendations to the agency on October 28 last to proceed to call in the loans.
The court heard a document put before the NAMA Credit Committee recommended enforcement of the loans.
These included pressure from Treasury's creditors and serious non co-operation by Mr Barrett and Mr Ronan in unwinding a controversial transaction under which €20m in shares was transferred by Treasury's Board, when it knew its loans were being transferred to NAMA, via transactions to Mr Barrett and Mr Ronan, in return for €100,000 and an unsecured €20m loan note.
The October 28 recommendation was not communicated to the court when Treasury sought leave earlier this year to bring the challenge, counsel said.
Treasury believed the enforcement decision was made in January but it later, from the leave hearing, learned the enforcement decision was made by the NAMA Board on December 8 following a NAMA Credit Committee recommendation on December 6.
Since the leave hearing, it learned from NAMA the decision to proceed to a loan enforcement strategy was made on October 28, "if not earlier", Treasury said.
The process put in place by NAMA leading to its Board decision of December 8 recommemnding the loans be called, and the actual calling in the loans on January 8, meant no investor bids were possible to put before NAMA as an alternative to calling in the loans, Mr Cush said.
Treasury and 22 related companies secured leave last March for judicial review of the NAMA decisions after Ms Justice Mary Finlay Geoghegan ruled they met the threshold of raising "substantial" issues to be tried.
When the loans were enforced in December 2011, Treasury was the "most successful" property operation in Ireland, Mr Cush said yesterday.
He said there are five central issues before the court with a key issue being whether the December 8 decision was a public law decision.