KBC gives Treasury days to pay €20m

TROUBLED IRISH property developer Treasury Holdings and its owners Richard Barrett and Johnny Ronan face further financial demands from lenders and the National Asset Management Agency, the Commercial Court heard yesterday.

KBC Bank Ireland served notice on June 29th that it would seek an order to wind up Treasury unless €20 million is paid within 21 days under a guarantee of loans to various Treasury companies. KBC is owed €75 million by Treasury.

In addition, Nama has issued repayment demands to Mr Barrett and Mr Ronan for €3 million each arising from guarantees of a €13.5 million loan to Treasury.

These details emerged on the first day of a hearing into Treasury’s bid to overturn Nama’s decision to call in about €1 billion in loans in January of this year.

There was potentially some good news for taxpayers with Michael Cush SC, for Treasury, informing the judge that the case was likely to take just one week to conclude rather than the two that had been pencilled into the diary, which should save on legal fees.

This drew a raised eyebrow from Ms Justice Mary Finlay Geoghegan. “The scepticism,” was Mr Cush’s light-hearted response, which elicited chuckling in court.

“No, no,” was the judge’s reply accompanied by a wry smile.

With the benches flanked by mountains of boxes containing case documents, Mr Cush began a near five-hour walk-through of Treasury’s application. He highlighted the key issues. The first was whether the decisions of the Nama board on December 8th, 2011 to move to enforcement, and of January 25th to move on the loans, were in the area of public law and amenable to judicial review. The second is whether the decision taken on December 8th was in breach of Nama’s duty to notify Treasury and to give it the opportunity to be heard. The court is also being asked to determine whether Nama failed to exercise its discretionary powers in a “fair and reasonable manner”.

The hearing was well attended in the morning but the crowd had thinned out after lunch as the dry and technical nature of Mr Cush’s submission took its toll.

Matters might liven up later in the week with Mr Cush indicating that Nama chief executive, Brendan McDonagh, and Treasury’s portfolio manager at Nama, Mary Bermingham, might be called to appear as a witnesses on Friday.