Grant Thornton denies conflict in O'Flynn case
High Court-appointed examiner had prepared Nama enforcement strategy against developer
Leading insolvency and corporate recovery specialists Grant Thornton were retained by Nama to prepare a plan of enforcement against developer Michael O'Flynn for use in the event that relations between them broke down prior to the sale of his companies' loans, the Sunday Independent has learned.
News of the firm's engagement by Nama in the case of Mr O'Flynn will raise eyebrows in legal and professional circles given its subsequent appointment by the High Court on July 29 last as interim examiner to four key companies within the O'Flynn Group.
The appointment - which has since been reversed - came on foot of an application by US private equity giant Blackstone which acquired the O'Flynn Group's €1.8bn loans from Nama for €1.1bn last May.
When asked by the Sunday Independent to outline the protocol it followed to avoid a conflict of interest or perception of a conflict of interest in relation to the O'Flynn Group in view of its original engagement by Nama and subsequent appointment by the High Court as examiner, Grant Thornton partner Michael McAteer said he could not comment on "specific client engagements" for reasons of client confidentiality.
However, Mr McAteer made it clear that Grant Thornton was fully compliant with the regulations set down by Chartered Accountants Ireland to deal with such matters.
He said: "At Grant Thornton our internal policy, which is fully compliant with Chartered Accountants Ireland regulations, is to address potential or perceived client conflict situations on a case by case basis in consultation with our clients."
Mr McAteer added that it was important to point out that any work Grant Thornton conducted on behalf of any client was "solely for the purpose of that client".
A spokesman for Nama declined to make any comment on the matter.
Blackstone also refused to comment. A spokesman said: "At the moment, Blackstone is not commenting or going on the record on matters with any media until it feels it is appropriate."
Efforts to contact Michael O'Flynn for comment were unsuccessful.
While Grant Thornton's engagements in relation to the O'Flynn Group may be met with suggestions that the company is part of the so-called 'Magic Circle' of legal and professional firms mopping up the lion's share of lucrative assignments thrown up in the wake of the economic crash, it should be pointed out that the company is one of a relatively-small number of insolvency practitioners operating here. And where Nama's engagement of Grant Thornton will no doubt come as a surprise to Michael O'Flynn in the light of his successful maintenance over four years of a consensual working relationship with the State agency, the preparation of contingency enforcement plans against all major borrowers is understood to be standard practice in the State's 'bad bank'.
Explaining Nama's rationale, a source at the agency said: "It's part of the 'twin track' approach Nama follows with borrowers. Enforcement plans are prepared as a fallback option to be used where relations between the parties break down. That can be down to a lack of co-operation on the part of the debtor or in certain cases, a breach of trust. A failure on the part of debtor to make a full disclosure in their statement of affairs would be one example of this." Separately, the existence of Nama's 'twin track' approach in relation to the borrowers on its books was confirmed last year in the course of a deposition given by former Nama portfolio manager, Kevin Nowlan, to lawyers for developer Sean Dunne in Connecticut.