Treasury begins case against Nama in High Court

TROUBLED IRISH property developer Treasury Holdings has begun legal proceedings against Nama. It is seeking substantial compensation and is contesting the constitutionality of the legislation governing its activities.

It is understood that Treasury, which is jointly controlled by businessmen Richard Barrett and Johnny Ronan, has made an application to the High Court on both matters.

This relates to Nama’s decision in January – first revealed by The Irish Times – to appoint joint receivers to certain assets secured against loans of more than €1 billion owed to the agency.

Treasury was in breach of the covenants on the borrowings and deemed insolvent when Nama called in the loans.

In March, Treasury won leave to pursue a judicial review of Nama’s actions.

The developer is now preparing to pursue two additional cases relating to Nama’s decision.

One will focus on the detrimental financial consequences for Treasury of Nama’s decision to call in its loans in January. The damages sought have not been quantified.

The other is being taken against the State and the Attorney General and will test the constitutionality of the Nama Act 2009 and of the way in which Nama used its powers when moving against Treasury.

The damages claim will focus on a number of issues relating to Nama’s decision to appoint joint receivers – PwC and Ernst Young – to some of Treasury’s assets earlier this year.

In particular, Treasury will highlight the losses it potentially incurred as a result of losing its effective 41 per cent interest in the multi-billion pound redevelopment of of Battersea Power Station in London.

Treasury lost its interest in the project when Lloyds Bank in the UK and Nama appointed Ernst Young as administrators last December.

Treasury will claim that it could have earned £400 million-plus in management fees from the Battersea Power Station project over a 15-year span.

It will also argue that Battersea could have achieved a £4.5 billion net profit over this time, which Treasury would have had a share in.

The Irish developer will cite an unwillingness by Nama to engage in negotiations with a Malaysian company called SP Setia, which it will claim was willing to make a cash offer at par value in relation to Treasury’s interest in the loan.

Nama is owed about £137 million relating to Treasury’s interest in Battersea.

Treasury will also argue that it has incurred substantial reputation damage from Nama’s actions, particularly in overseas projects in St Petersburg and China.

In addition, it will argue that Nama’s actions have stalled the sale of apartments in Dublin’s Spencer Dock and deprived its investor clients of cashflow from rents paid on 200 suites at the Ritz Carlton hotel in Enniskerry.

A Treasury spokesman confirmed the legal moves but would not comment further. Nama declined to comment.