Commercial Property

Project Eagle deal still paying out for vulture fund

Row over €1.6bn Project Eagle deal has not gone away

Frank Cushnahan: former Nama adviser was hoping to share in a £16 million fee with US lawyers Brown Rudnick and Belfast solicitors Tughans, if that company had succeeded. Photograph: Press Eye

Thu Dec 7 2017 - 06:00

Accounts for Promontoria Eagle, the Irish subsidiary that US vulture fund Cerberus used to buy State asset agency Nama's Northern Ireland loans, should remind a few people that the row over the €1.6 billion deal has not gone away.

Project Eagle, as the April 2014 transaction was known, found itself at the centre of several investigations after it emerged that a former Nama adviser, Frank Cushanan, was working for one of the other bidders for the loans, Pimco.

He was hoping to share in a £16 million fee with US lawyers Brown Rudnick and Belfast solicitors Tughans if that company had succeeded.

The Government has appointed retired High Court judge John Cooke to investigate the deal. This followed a Dáil Committee of Public Accounts inquiry that was in full swing a year ago. Meanwhile, the UK National Crime Agency is continuing its investigation of certain aspects of the transaction in Northern Ireland.

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Aside from this, the controversy shone a light on the use by all vulture funds – not just Cerberus – of section 110 of the Taxes Consolidation Act to minimise payments to the exchequer on profits from assets that they bought at bargain prices from the State and banks operating in the Republic.

The incentive allowed the funds to write off the repayments on loans used to purchase the assets against their profits. Controversy over its use prompted the Government to close the loophole for assets located in the Republic, though not for those based outside this jurisdiction.

This means that Promontoria Eagle, the company behind the deal that first sparked the controversy over vulture funds’ use of the incentive, continues to benefit from it, as many of its assets are located in Northern Ireland, Britain and the Continent.

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