The liquidators of Treasury Holdings want the company to join with the National Assets Management Agency (Nama) in pursuing a legal action against the developer’s co-founders, John Ronan and Richard Barrett, aimed at unwinding a controversial €20 million transaction.

Nama earlier this year brought proceedings against Treasury Holdings, Mr Barrett and Mr Ronan over a transaction relating to Treasury Asian Investments, where €20 million shares were allegedly transferred out of the group to the benefit of Mr Barrett and Mr Ronan for €100,000 and unsecured loan notes.

Since then, Treasury has been wound up and joint liquidators appointed. They want Treasury to be a plaintiff in the case. If the liquidators’ application is granted, Treasury would be the “enemy” of the defendants, rather than their ally, Mr Justice Peter Kelly observed yesterday.

Nama, which acquired some €1 billion of Treasury’s €2.7 billion loans in April and May 2011 after the Asian Investments transaction of March 22nd, 2010, claims there was no commercially valid reason for that transaction made when Treasury was either insolvent or in very difficult financial circumstances.

Breach of duty

In entering into the transaction, Mr Barrett and Mr Ronan failed to act in the best interests of Treasury and/or its creditors, breached their fiduciary duty to the company and creditors and breached the Nama Act, it is claimed.

In an affidavit, John Bruder, managing director of Treasury, said the Asian Investments transaction was not illegal and there was a valid commercial reason for it. He also argued Nama’s handling of Treasury’s efforts to sell the group’s Nama loans had damaged efforts to reach agreement on the Asian Investments issue.

The case relates to the March 22nd 2010 Asian Investments transaction where €20 million shares in China Real Estate Opportunities were transferred by three Treasury subsidiaries into another wholly owned Treasury subsidiary – Daylasian – for unsecured 10-year loan notes with a face value of some €18.4 million.

Alleges

Nama claims the economic effect of that transaction alone on Treasury was neutral but, it alleges, on the same date, the defendants caused Treasury to transfer its interest in Daylasian to Mr Barrett and Mr Ronan for €100,000, leaving Treasury with an unsecured loan note instrument from what was no longer a group company.