Tag Archives: fat cats

Banana Nama – 2

Sorry, but I can’t let this topic go.

The Government’s NAMA has bought €77 billion worth of loans from the banks. The property relating to these loans is worth €47 billion, but we’re paying €54 billion for them. We’re told that it’s not a bailout, that NAMA will pursue the developers for their loans just as diligently as the banks would have. And I’ve no doubt that Brian Lenihan believes that.

Ok, let’s keep it simple.

A property company, Balls of Brass Limited, borrowed €1.5 million from AIB to buy a property. This property is now worth €1 million. We have bought the loan from AIB for €1.15 million, to reflect “long term economic value”.

Next week Balls of Brass goes into liquidation. It is entitled to do this, indeed obliged to, as it is hopelessly insolvent. Its only creditor, which is us, gets legal ownership of its only asset, the property which is worth €1 million.

And we’ve just paid €1.15 million for it.

And that’s the end of it. The company is in liquidation – effectively deceased – so there is no-one and nothing left to pursue. The company has met all its legal obligations by handing over its asset to its creditors. No-one has done anything legally wrong.

But we’ve just lost money, unless the Government intends to hang on to the building in the hope that prices will rise. What if they keep falling? At what stage does NAMA lose its nerve and sell for even less than the €1 million it’s supposedly worth now? 

Bank share prices surged on Thursday after the figures relating to NAMA were released. You can see why.

An Odd Development

A cowboy

A cowboy

A development company called Kimpton Vale Limited has been fined €1,000 after it illegally demolished the 19th-century Presentation Convent on Terenure Road West.

It was demolished in November 2006, just two weeks after Dublin City Council began the process of adding it to the Record of Protected Structures. Bulldozers moved in to demolish the convent at 7am and by the time a council official arrived at 9.30am, so much had been razed that the remainder had to be demolished on public safety grounds.

In September 2007 Dublin City Council ordered the company, and its principal Laurence Keegan, to rebuild the convent. An Taisce were thrilled at the time.Their Heritage Officer Ian Lumley said “Dublin City Council have led the way in this regard, we welcome their decision to instruct the developer in Terenure to rebuild and we would urge other local authorities to follow their example”.

By December 2007, however, the company had ignored two opportunities to re-build it, and the Independent reported that it now faced “fines of up to €12.7m”.

Fast forward now to this Thursday in the Dublin District Court. Firstly, the charges against Laurence Keegan (who is currently disqualified from acting as a company director after he and another company he was involved with made large tax settlements with the Revenue) were struck out. This makes sense only if the judge believed that Kimpton Vale Limited is a sentient being with a mind of its own, and that Keegan had nothing to do with the decision to send the bulldozers in.

Then a solicitor for the company said “his client had been under the impression that an exemption from permission applied in this case”. Why, then, did they start the demolition at 7am? Did anyone ask the solicitor that?

And how did potential fines of €12.7 million become just one thousand euro? Why weren’t they made sell the whole site (which they paid €15m for) and fined the maximum possible?

This case says so much about regulation in Ireland. A bunch of people at the top bounce happily along, laughing down at, and holding two fingers up to, the rest of us, knowing they can do what they like and get away with it.

Kimpton Vale are now expected to apply for planning permission for the site. I’d say Keegan reckons it was €1,000 well spent.