NAMA seeks judgments against Harry Crosbie

Monday 31 March 2014 16.11
NAMA appointed receivers to the companies in April 2013
NAMA appointed receivers to the companies in April 2013

The National Assets Management Agency has asked the Commercial Court for judgments orders for €77m against businessman Harry Crosbie.

The action arises from personal loans and personal guarantees for the liabilities of two companies.

NAMA claims €77m was due on 16 February under personal loan facilities granted to Mr Crosbie in May 2011 by Allied Irish Banks and under his personal guarantees concerning some of the liabilities of Shoal Trading Ltd and Ossory Park Management Ltd (OPML).

Lawyers for Mr Crosbie told Mr Justice Peter Kelly he would be opposing the application.

Senior Counsel Michael McDowell said despite having "pocketed" €35m following an agreement on the sale of assets, NAMA was now seeking to resile from aspects of the agreement.

NAMA appointed receivers in April 2013 after demand for repayment under the loans and guarantees.

Last month, NAMA served a further demand on Mr Crosbie seeking payment by 17 March.

In correspondence with NAMA, solicitors for Mr Crosbie said he had concluded a "solemn" agreement with NAMA in August 2012 but, since then, "for reasons known only to you", NAMA repeatedly denied any such agreement.

In light of that alleged agreement, the solicitors said they could not see how NAMA could issue its latest demand which would be "vigorously defended to the fullest extent".

In reply, NAMA's lawyers said its position on the "purported agreement" had been fully set out and it was fully entitled to demand repayment and to proceed to seek judgment. 

NAMA took over Mr Crosbie’s and his companies’ AIB loans in 2010 but is not looking for judgment against him for money owed under a separate €353m facility for the development of the Point Village.

Recourse for the €353m is limited to assets provided as security, plus an additional personal recourse amount, it noted.

"Significant" sums realised from security granted by Mr Crosbie have been applied to reduce his debts under the Point Village loans, including €27m from the sale of his shareholding in Amphitheatre Ireland Ltd, the agency said.

In its action, NAMA alleges it initially refrained from enforcement action over the debts of Mr Crosbie and connected companies - referred to as the Connection - and instead worked in good faith with the Connection in efforts to complete the Point Village and deal with the debts.

However, the agency claims Mr Crosbie failed to make full and frank disclosure concerning his assets and liabilities before the sides had entered into a Memorandum of Understanding in early 2012 setting out the commercial terms for co-operation between them. 

Because of the deficit between the debt and the value of the secured assets, any consensual strategy had to be based on Mr Crosbie granting additional security over his unencumbered assets, the agency said.

Due to the alleged failure to make full disclosure related to those assets, NAMA said it was obliged to terminate the MOU in August 2012.

NAMA said it gave the Connection another opportunity after that date to reduce its debts through agreements for disposal of secured assets but became increasingly concerned during 2012 and 2013 about the effectiveness of Mr Crosbie's day-to-day management of the assets.

It later decided the assets would be better managed by receivers and appointed receivers in April 2013.

Having been told today Mr Crosbie was not objecting to the case being fast-tracked in the Commercial Court, Mr Justice Kelly granted the application by Paul Sreenan SC, for NAMA, to transfer the proceedings to that court's list, made directions for exchange of legal documents and fixed the summary judgment application for hearing on 14 May.

The judge noted the court had received a memorandum of understanding and a statement of affairs which the sides had agreed were to remain confidential for reasons of commercial sensitivity.