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Treasury case is now getting 'ridiculous', claims NAMA


Justice Mary Finlay Geoghegan is presiding

Justice Mary Finlay Geoghegan is presiding

Justice Mary Finlay Geoghegan is presiding

NAMA claimed yesterday that things were "almost reaching ridiculous levels" if the law required it to engage in "endless debate" before it called in Treasury Holdings' €1bn loans.

Treasury was an "insolvent debtor" and unable to continue trading without money from NAMA before it was decided to appoint receivers to the company's properties here, the Commercial Court heard.

At the time NAMA decided to call in the loans late last year, Treasury was "burning up" cash and continuously looking to NAMA for more money, Paul Sreenan, for the agency, said.

NAMA, which provided more than €100m in working capital to Treasury after acquiring some €1.7bn of its overall €2.7bn debt in 2010, called in the loans after a long process of engagement with Treasury in an effort to agree term sheets, Mr Sreenan said.

That decision was made in circumstances where Treasury was insolvent; dependent on NAMA for money to keep trading; had failed to provide a satisfactory strategy to deal with its creditors; and where NAMA had considered and rejected "investment" proposals, he outlined to Ms Justice Mary Finlay Geoghegan.

Treasury, Mr Sreenan added, had also made various attempts to go back on a significant agreement with NAMA to unwind a controversial transaction.

This was where €20m in shares was transferred by Treasury's board, when it knew its loans were being transferred to NAMA, via a series of transactions to Treasury founders Richard Barrett and John Ronan for €100,000 and an unsecured €20m loan note.

Additional information provided by Treasury in the period leading up to the calling in of the loans and appointment of receivers only accentuated NAMA's concerns about Treasury's strategy to deal with its creditors, Mr Sreenan said.

The commercial landscape had also changed and Treasury, as an insolvent debtor, had no right to engage in endless debate with NAMA, he said.

In its legal challenge to the calling in of its loans, Treasury was essentially arguing the law required NAMA to tell Treasury that NAMA was thinking of writing a letter to Treasury demanding money that Treasury admitted it owed to NAMA, Mr Sreenan said.

It was "almost reaching ridiculous levels" if NAMA, as a statutory body, had to engage in that level of consideration and endless debate, he said. It was clear NAMA had given Treasury an opportunity to be heard and Treasury was an experienced developer.

Treasury was also not entitled to take legal action in circumstances where it had a standstill agreement with NAMA last January during which NAMA had engaged with the proposed investors, he added.

Mr Sreenan was making arguments opposing the action by Treasury Holdings and 22 related companies to the December 2011 decision calling in the loans and a January 2011 decision appointing receivers.


Among various claims, Treasury alleges that decision was taken with no notice to it and without giving it a fair and reasonable opportunity to be heard.

Earlier yesterday, in further submissions for Treasury, Michael Cush argued a comment at a NAMA credit committee meeting warning against "tipping off" Treasury about moves to call in its loans was characteristic of the agency's dealings with the developer up to the decision to call in the loans.

NAMA did not want to tip off Treasury about proceeding to enforce the loans because it feared Treasury would seek court protection and the appointment of an examiner, he said.

Mr Cush also disputed arguments by KBC Bank, owed €75m by Treasury, that the Treasury action is pointless because KBC had said it would not agree to any restructuring of the Treasury loans. If NAMA had not decided to enforce the Treasury loans, KBC could not have moved to enforce, he argued.

KBC, in a notice served last Friday, said it would seek an order winding up Treasury unless it was paid €20m within 21 days of that demand. NAMA also issued demands for repayment of €3m each to Mr Ronan and Mr Barrett in their capacity as guarantor of a €13.5m loan to Treasury.

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