Monday 19 February 2018

Harry Crosbie 'drew no salary for three years, but did claim €1.7m in expenses'

Vicar Street
Vicar Street

Tim Healy

Harry Crosbie took no salary for nearly three years from his last remaining business, the Vicar Street music venue in Dublin, but did draw some €1.7m from it to pay for his living and trading expenses, the Commercial Court heard.

During that period, 2013-16, he paid around €30,000 in income tax, the court also heard.

Mr Crosbie said he had been advised, after most of his businesses were taken over by Nama, not to draw a salary or profits until a dispute with Ulster Bank over the amount of rent on Vicar Street was sorted out.

He was being cross-examined by Paul Sreenan SC, for Nama, in its efforts to execute €77m judgment it obtained against him in 2014.

Mr Crosbie had supplied statements of affairs in advance of his appearance, which showed he had made loans, gifts and transfers of cash to his wife Rita, to her Grand Canal dock "Cafe H" business and to his daughter. Those transfers were done on the basis of financial advice to make the best use of cash within the family businesses.

He accepted he had paid the mortgage on his daughter's €700,000 home in Booterstown from Vicar Street takings and that he had paid the local property tax for that house, as well as for a house owned by his wife in Wexford. While that tax should not have been paid, he expected he would get back the money back from his daughter, as this was a loan. He said his son Simon's home in Booterstown had originally been put in his (Harry's) name to save on stamp duty, but he now realised that had been an error of judgment, as it had also been used as security for his indebtedness.

Mr Crosbie said, however, that as part of an agreement, Nama had agreed to release any claim over both his son's home and over his (Harry's) home in Hanover Quay, Dublin. He had transferred his 50pc interest in the family home to his wife and did not know the value of it, nor had he asked to know "because I was in Nama". He said efforts were being made to sell three apartments he part-owned in France, but he believed the price tag would have to drop if they were to sell. He had transferred his share in another property on the Cote D'Azur to his wife, he said.

Asked about why Vicar Street, which was also excluded from the Nama claim, was valued at €6m in 2012 and minus-€4.2m four years later, Mr Crosbie said this was partly due to issues over rent arrears to Ulster Bank, which the court heard had originally bought the property and rented it to Mr Crosbie at between €700,000 and €850,000 per annum.

Mr Crosbie said after the economic crash, the venue was not making enough money to pay that level of rent sought.

Aiken Promotions rents the premises from Mr Crosbie at €400,000 while Mr Crosbie runs the bars and provides maintenance. Mr Crosbie said there was no written contract with promoter Peter Aiken, and they had operated on the basis of a handshake.

The minus-€4.2m valuation was also due to problems in relation to title relating to the overall property, which had been extended by renting adjoining buildings, he said.

The valuation was also on the basis of a similar approach used when Mr Crosbie's share in the other major venue he founded, the Point Depot, now the O2, was sold by Nama to meet his debts. The Point was sold for some €35m, or about six times its profitability, he said.

Using that equation, and taking into account the €4.1m rent arrears, that was how the Vicar Street valuation was arrived at.

Mr Crosbie said he believed that the entire Point Village development - which includes a shopping centre, hotel and cinema - was worth tens of millions and would be more than enough to pay off his debt. However, he said he was unable to find out what was going on with it because of Nama's "secrecy".

Irish Independent

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