DEUTSCHE BANK has expressed an interest in purchasing the €457 million loans held by developer David Daly and his children with Allied Irish Banks, which were called in last month by the National Asset Management Agency, the High Court heard yesterday.
Moving the loans to Deutsche Bank would be “hugely” in the interest of the Dalys who, despite having initiated the talks with Deutsche Bank, are being excluded from the current negotiations by Nama, Michael Cush SC said.
The Dalys understood Deutsche Bank has offered “hundreds of millions” for the loans even since Nama appointed receivers over some of their properties, he said.
The Dalys were very concerned Nama may move to dispose of “trophy” assets held by them in London, including the Louis Vuitton building on Bond Street, counsel added. If that asset was taken out of the portfolio, the prospects of a foreign purchaser taking over the loans, which remain live, would be adversely affected. If Nama disposed of various assets, there was a distinct possibility the Dalys would be left with a shortfall and their income stream would be removed.
Mr Cush was opening an application, due to last four days, before Mr Justice Michael Peart by Mr Daly, his daughter Joanne and son Paul, aimed at securing injunctions restraining the appointment by Nama of receivers over their properties. The injunctions are sought pending the outcome of a possible full action challenging Nama’s calling in of the AIB loans last month.
Under the Nama Act 2009, the Dalys first have to secure leave from the court to bring an application for injunctions and must show substantial grounds before leave may be granted. If they secure leave, the court may then only grant the injunctions if satisfied damages would not be an adequate remedy for the Dalys.
The proceedings are against a Nama company, the receivers appointed, Nama itself, AIB and the State.
The case arose after Nama, which acquired the Dalys’ loans last year, moved last month to appoint receivers over properties after giving the Dalys a 24-hour period to repay the loans which, Mr Cush said, could not be done. Nama contends almost all the loans are on-demand facilities but the Dalys dispute that claim.
In many ways, Mr Daly’s position was similar to that of property investor Paddy McKillen, counsel said. However, unlike Mr McKillen, Mr Daly had not resisted Nama’s acquisition of the AIB loans last year because he believed he had nothing to fear from Nama. It was not until later Mr Daly began to appreciate how different the Nama business model was from his own and this inevitably led to a clash of interests.
Mr Daly had dealings with Nama between September 2010 and June last but, while considerable agreement was reached, significant areas of disagreement remained, including over “very substantial transfers” by Mr Daly to his wife Mary. The court was not being asked to express a view on the commercial position of the sides but should bear in mind the Dalys used a legitimate business model over years and were entitled to protect themselves against Nama’s interests.
David Daly set up Manor Park Homebuilders with others and in 1995 he was bought out of Manor Park after which he set up Albany Homes Ltd. He used Bank of Ireland as banker to Albany while AIB was his personal banker.
