Businessman challenges constitutionality of Nama

yehbut_nobut

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legal challenge to NAMA - first of several?

Developer McKillen takes first legal challenge against Nama - The Irish Times - Wed, Jul 07, 2010

THE FIRST legal challenge has been taken against the National Asset Management Agency (Nama) to stop the transfer of loans from a multimillion-euro borrower whose bank debts are earmarked for transfer to Nama over the coming months.

Businessman Paddy McKillen, owner of the Jervis Shopping Centre in Dublin, is trying to prevent the transfer of his loans and those of his business from Bank of Ireland and Anglo Irish Bank to Nama...

Mr McKillen and 15 of his property companies have begun a judicial review case against Nama, the State and the Attorney General in the High Court to challenge the legality of the State agency.

A spokeswoman for McKillen’s companies said: “There is no justification in Nama taking our loans. All our loans are fully performing against quality assets, with no land and developments. We are simply protecting our business.”

Could get interesting (ie even worse) if NAMA's not allowed take performing loans...
 
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corelli

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I really don't see what his issue is, or his case. It's perfectly acceptable for one institution to transfer/sell a debt owed to them to another. Maybe I am missing something.
 

EvotingMachine0197

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I really don't see what his issue is, or his case. It's perfectly acceptable for one institution to transfer/sell a debt owed to them to another. Maybe I am missing something.
I think it might be a case of being worried about the optics, he doesn't want his companies associated with NAMA because NAMA is a filthy word in some minds.
 

Asparagus

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So if all the loans are performing fully whats he got to worry about - just needs to change his direct debits surely...
 

yehbut_nobut

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Businessman Paddy McKillen, owner of the Jervis Shopping Centre in Dublin... is understood to be claiming their transfer would have a negative effect on his business.
I wonder if anyone will conceed he has a point? ie: Owing money to NAMA is not seen as a good thing, because it puts you in the same category as Fingers, Fitzy and the rest...
 

The_SR

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I wonder if anyone will conceed he has a point? ie: Owing money to NAMA is not seen as a good thing, because it puts you in the same category as Fingers, Fitzy and the rest...
As may be, but its hardly a compelling legal arguement is it?
 

Dreaded_Estate

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I wonder if anyone will conceed he has a point? ie: Owing money to NAMA is not seen as a good thing, because it puts you in the same category as Fingers, Fitzy and the rest...
Fingers and Fitzy don't have any loans in NAMA.

I don't think he has any case the bank has always been free it sell its assets at any time. But these legal cases will increase NAMAs expenses significantly
 

grafter1

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McKillen should do what another Nama bound developer who's paying his interest is doing - get financing from a foreign bank to buy out the lot. Developer is free of the farce that is Nama, taxpayer makes a rare profit as loans are bought at 100c on the euro. Everyone's a winner - well perhaps except the Nama business plan which was budgeting for interest on those loans for several years.

Problem solved
 

Asparagus

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I'd love to see the projections if SCAMA loses this case and all the performing loans stay with the SCUMBANKS

what do ye reckon 40billion loss?
 

powderfinger

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Fingers and Fitzy don't have any loans in NAMA.

I don't think he has any case the bank has always been free it sell its assets at any time. But these legal cases will increase NAMAs expenses significantly
Will Tysan's borrowings through Anglo transfer to Nama?
Property firm of FitzPatrick, O'Brien and Quinn €5m in red in May 2008 - The Irish Times - Sat, Nov 07, 2009

A PROPERTY company whose backers include former Anglo Irish Bank chief Seán FitzPatrick, media owner Denis O’Brien and ESB chairman Lochlann Quinn, along with a who’s who of Irish business, ended last year in €5 million in the red.
In 2005, Mr Fitzpatrick, Mr O’Brien and Mr Quinn, along with developer Pat Doherty, the then Dublin Docklands Development chairman, former Anglo director Lar Bradshaw and Smurfit chief executive Gary McGann were named as the backers of Tysan Investments, which bought two office blocks in Sandyford, Co Dublin, from Green Property.
 

The Field Marshal

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I really don't see what his issue is, or his case. It's perfectly acceptable for one institution to transfer/sell a debt owed to them to another. Maybe I am missing something.
State sequestration of private assets by compulsory order is most likely unconstitutional.
 

corelli

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State sequestration of private assets by compulsory order is most likely unconstitutional.
It's not sequestration. It's an agreement, asked for by Banks, between Banks and the State. No bank is being forced. They can't wait to give the loans to the State. Given that the banks actually own the "paper" on these buildings, I can't see any issue. The guy who owns Jervis, for instance, really only has control of it. The banks have possession of the deed, much like a mortgage. So, the asset is not really his.
 

grafter1

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Someone posted a thread on Nama linking stuff from the Bulgarian(?) economist - one of the few good ones. This thread is now closed.

There was a passage from the Nama business plan about interest rate swaps - i.e. derivative contracts.

Would it be possible to post it here (seeing as this is a Nama thread of sorts) or another Nama thread?

Thanks
 

The Field Marshal

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It's not sequestration. It's an agreement, asked for by Banks, between Banks and the State. No bank is being forced. They can't wait to give the loans to the State. Given that the banks actually own the "paper" on these buildings, I can't see any issue. The guy who owns Jervis, for instance, really only has control of it. The banks have possession of the deed, much like a mortgage. So, the asset is not really his.
Have you read the legislation on NAMA?
I have given it ,admittedly only a cursory glance, but there are plenty of shalls and coercion type clauses with dire threats re secrecy and so on.

I believe the state has the power to compel the banks to hand over these loans.


Sequestration=
[1]the action of taking legal possession of assets until a debt has been paid or other claims have been met eg if court injunctions are ignored, sequestration of trade union assets will follow.
[2] the action of taking forcible possession of something; confiscation : they demanded the sequestration of the incriminating correspondence.

One way or the other it is sequestration.

National Asset Management Agency Bill 2009

Form and effect of compulsory acquisition transfer order.
143.—(1) A compulsory acquisition transfer order shall be in the prescribed form and shall
have attached to it a map of the land to which it relates.
(2) A compulsory acquisition transfer order vests—
(a) the land specified in it in NAMA in fee simple free from encumbrances and all
estates, rights, titles and interests of whatever kind (other than any public right
of way) , or
(b) such other relevant right as the Court may specify,
97
with effect from a specified date not earlier than 21 days after the making of the compulsory
acquisition transfer order.
(3) NAMA shall cause a compulsory acquisition transfer order to be sent to the Property
Registration Authority under the Registration of Title Act 1964 and the Registration of Deeds
and Title Act 2006. The Property Registration Authority shall cause NAMA to be registered
as owner of the land or relevant right in accordance with the order.


http://www.rte.ie/news/2009/0730/namadraft.pdf
 

johnfás

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State sequestration of private assets by compulsory order is most likely unconstitutional.
First the Constitution does allow for compulsory acquition of public property provided there is a public good. Second, the issue does not arise in this case as there is no compulsory acquisition. The banks have sold their asset (the debt of a developer) to a third party to whom the developer now owes the debt. This happens regularly in banking, albeit not in the circumstances we are in.

In regard to EVM above re optics. I'm quite sure developers who are OK want to have nothing to do with NAMA as it is poor optics. However, the optics of it are irrelevant insofar as the legality of selling a debt to a third party are.
 

corelli

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Have you read the legislation on NAMA?
I have given it ,admittedly only a cursory glance, but there are plenty of shalls and coercion type clauses with dire threats re secrecy and so on.

I got the very definite impression that the state has the power to compel the banks to hand over these loans.


Sequestration=
[1]the action of taking legal possession of assets until a debt has been paid or other claims have been met eg if court injunctions are ignored, sequestration of trade union assets will follow.
[2] the action of taking forcible possession of something; confiscation : they demanded the sequestration of the incriminating correspondence.

One way or the other it is sequestration.
But my simple point is that the Banks asked for NAMA and agreed to the transfer of their dodgy loans to it. The Legislation merely facilitates and regulates that transfer. The guy, for instance, who owns the Jervis Centre, position remains as was. He just has a new institution to pay.

It's effectively one bank selling debt, good and bad, to another. Save in this instance, there is no consideration.
 

johnfás

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It's effectively one bank selling debt, good and bad, to another. Save in this instance, there is no consideration.
Even that isn't clear. I would have to read the NAMA Act but if there is reference to recapitalisation in the Act there is also likely sufficient consideration.
 

The Field Marshal

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First the Constitution does allow for compulsory acquition of public property provided there is a public good. Second, the issue does not arise in this case as there is no compulsory acquisition. The banks have sold their asset (the debt of a developer) to a third party to whom the developer now owes the debt. This happens regularly in banking, albeit not in the circumstances we are in.

In regard to EVM above re optics. I'm quite sure developers who are OK want to have nothing to do with NAMA as it is poor optics. However, the optics of it are irrelevant insofar as the legality of selling a debt to a third party are.
There is compulsory acquisition.

National Asset Management Agency Bill 2009

Form and effect of compulsory acquisition transfer order.
Section 143.—(1) A compulsory acquisition transfer order shall be in the prescribed form and shall
have attached to it a map of the land to which it relates.
 

corelli

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Even that isn't clear. I would have to read the NAMA Act but if there is reference to recapitalisation in the Act there is also likely sufficient consideration.
No direct consideration would be a better phrase, perhaps. I would have thought that having dodgy debt wiped off your balance sheet is sufficient consideration, in any event.
 


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