Mogul takes philosophical approach to agency's move
Sean Dunne last night appeared very relaxed and almost philosophical about what may lie ahead for him after NAMA put most of his Irish property empire into receivership.
But because Mr Dunne gave personal guarantees over much of the debt held by his company DCD Builders Ltd (and its subsidiaries), he could be facing a few anxious months ahead if NAMA decides to pursue the issue.
According to company records, Mr Dunne has given guarantees over huge sums of debt. It is impossible to be precise about the exact amounts, but the last set of accounts for DCD show Mr Dunne guaranteeing at least ¿40m in debt.
NAMA could seek to recover the debts Mr Dunne has personally guaranteed. The 'bad bank' is now a creditor of Mr Dunne's various companies and holds all the negotiating power.
Several prominent Irish businessmen have already fallen victim to the pursuit of money personally guaranteed by them during the boom, including Brendan Murtagh, of Kingspan, and financier Niall McFadden. Philip Lynch is another businessman facing action from a bank over claims he gave personal guarantees over property debts (although Mr Lynch denies this).
Last night Mr Dunne said he wasn't worried about what might happen. In fact, he said if NAMA decided to take this course, so be it. "When you borrow money you know there are consequences when you can't repay the debt,'' he told the Irish Independent.
However, NAMA has so far shown little appetite for pursuing people personally through the courts and chairman Frank Daly has said the agency is not interested in being vindictive. Instead it wants to make a return for the taxpayer by selling the assets at a profit.
If that policy continues, Mr Dunne is unlikely to find himself facing any problems in court. All that NAMA did yesterday was appoint a receiver to his Irish property assets.
Taking action over the debts he has pledged to pay back in the event that his companies cannot do so is a different matter. NAMA would have to seek a judgment against Mr Dunne personally in order to reclaim these sums. It is not clear how many personal guarantees Mr Dunne has given or their current legal status, a point likely to be tested in any court case.
It is also not clear if Mr Dunne has given security to the banks over his personal assets, which include properties in the US and in Ballsbridge, Dublin. There is also an office in Merrion Square that is owned by his companies.
What complicates the picture is NAMA's confusing approach to personal guarantees. While it rarely takes action over these guarantees, this position is not absolute.
For example, last November the agency sought judgment in the Commercial Court against developers Patrick Shovlin and Patrick and Anthony Fitzpatrick in respect of personal guarantees they gave to Bank of Ireland.
The whole issue of personal guarantees is also quite murky. Each bank had a different policy in relation to these guarantees. Some banks used them very liberally during the boom, others only on very big deals. Some banks included the family home as part of the guarantee, others did not.