NAMA out of pocket despite winning Treasury court bid
AGREEMENT has been reached between NAMA and the joint liquidators of Treasury Holdings over some of the costs of a court bid by the company to challenge the takeover of its loans by the agency.
However, NAMA argued in the High Court that Treasury should never have taken the legal challenge which the insolvent developer ultimately lost.
Despite winning the action, NAMA now faces having to pay very substantial legal costs due to the insolvency of Treasury.
NAMA had sought to have funds lodged in court by Treasury as security for costs, but a sum of €600,000 lodged by Treasury would not be sufficient, Paul Sreenan SC, for NAMA, told Ms Justice Mary Finlay Geoghegan.
The €600,000 was "certainly not" a full order for costs as the sum due to NAMA was in excess of that and this action should never have been taken in the first place, counsel said yesterday.
Treasury should not have taken the case, given its agreement with NAMA last January not to take legal proceedings if NAMA entered into a two-week "standstill agreement" to consider alternative "investment" proposals advanced by Treasury, counsel said.
NAMA did agree to the standstill period, but Treasury initiated legal action after NAMA rejected the "investment" proposals.
Ms Justice Finlay Geoghegan was dealing with costs issues arising from the long and costly litigation initiated by Treasury and 22 related companies last January challenging the takeover of some €1.7bn of its loans by NAMA.
Treasury ultimately lost the case in July and earlier this month, in separate proceedings, consented to a bid by KBC Bank for orders winding up 17 companies.
Yesterday, the judge heard NAMA had reached an agreement with the joint liquidators of some of the Treasury companies in relation to some costs of the action by the developer against the agency.
That agreement included release to NAMA of a sum of €600,000 which Treasury had lodged as security, plus release of charges over four properties. The agreement provided for no order for costs in relation to some of the Treasury companies in the case, meaning each side pays their own legal costs.
The release of the security would not meet all of NAMA's costs of defending the case, Mr Sreenan said.
The judge noted the costs agreement between the liquidators and NAMA and said she would rule later on a costs application from KBC and on a number of other issues arising from the proceedings.