A New York judge has dismissed a case being taken by developer John Flynn and related entities against the National Asset Management Agency and the former management of Anglo Irish Bank using anti-Mafia laws.
District Judge Lewis A Kaplan ruled in the southern district of New York yesterday that a civil racketeering case being taken by Mr Flynn and four members of his family should be dismissed on the grounds that it related to Ireland more than the United States.
The decision will be watched closely by other developers who are considering taking against against Nama in the US rather than at home.
A source close to Mr Flynn said he planned to file a motion of reconsideration within days to ask the judge to review his decision.
Mr Flynn, his family and related companies, owe the former Anglo Irish Bank more than $200 million in relation to 84 loans used to buy property in Ireland, the United States and elsewhere.
Among the 23 parties being sued by the Flynns were Brendan McDonagh, the chief executive of Nama, Alan Dukes and Mike Aynsley, the post-nationalisation chairman and chief executive respectively of Anglo, as well as the bank's senior management during the boom.
The Flynns had been trying to take the case using the anti- Mafia Racketeer Influenced and Corrupt Organizations Act (the Rico Act) to bring a civil action for alleged acts performed as part of an alleged criminal organisation.
In filings, the Flynns claimed, according to Judge Kaplan: "To have discovered in 2010 that the bank . . . had been overcharging them for over a decade." The sum in question is about $12 million.
“They allege, on information and belief, that the bank then entered into a conspiracy with Nama and the Irish government ‘to cover up the fraudulent charges and intimidate the Flynn plaintiffs into silence’ in order to preserve the assets of the bank and its successor.” All parties named by the Flynns have denied this.
Judge Kaplan said: “This controversy has virtually nothing to do with New York, even granting that some of the 84 loans at issue were partly negotiated here. There is little reason to accept the possibility of imposing on New York jurors to decide this case if it were to go to trial.”
Earlier this month the Flynns had a success in Dublin's High Court when the High Court ruled that Nama had acted "unlawfully" calling in a €22 million loan owed by them.
Mr Justice Brian Cregan said the agency had breached its statutory duty of transparency by giving "inaccurate and misleading" reasons for calling in the Flynn debt.
Nama had also denied the Flynns their right to be heard, he said.
