PROPERTY DEVELOPER Bernard McNamara is seeking to have the Dublin Docklands Development Authority (DDDA) guarantee his exposures in a dispute where he faces being sued for in excess of €140 million.
The dispute arises from arrangements put in place for one of the largest property deals conducted during the property boom – the 24.9 acre former Irish Glass Bottle site in Ringsend, Dublin 4, which cost the purchasers €424.34 million.
The developer yesterday had his case admitted to the fast-track Commercial Court, which was told he is being sued by a group of investors organised by Davy Stockbrokers, who lent him €62.55 million in January 2007, at an interest rate of 14 per cent per annum. Mr McNamara also faces a potential claim of €45.9 million, plus interest, from the now nationalised Anglo Irish Bank.
In an affidavit, Mr McNamara said he was contacted by the then chief executive of the DDDA, Paul Maloney, in October 2006, who asked if Mr McNamara was interested in jointly bidding for the site. Mr McNamara said Mr Maloney told him the DDDA had powers which would allow it fast-track any application to develop the site, without risk of an appeal to An Bord Pleanála.
A company called Becbay eventually bid successfully for the site. It secured a loan of €288.4 million from Anglo Irish Bank, (which later split the provision with AIB), and got capital injections from its three shareholders: the DDDA; Mr McNamara’s company Donatex, and a company owned by the property financier, Derek Quinlan. Between them they put up €136 million. Mr McNamara guaranteed some of the bank borrowings. Donatex in turn secured its finance (€62.5 million) from a group of investors put together by Davy Stockbrokers. The names of these investors have not been revealed.
They are represented by a company, Ringsend Property Ltd, which has an address in the Channel Islands. Again Mr McNamara supplied a guarantee. Mr McNamara is claiming he is entitled to damages and indemnities from the DDDA because it made claims concerning its ability to secure planning for the site, which have not transpired to be correct. A spokesman for the DDDA, speaking after the court application, said it would vigorously contest the case. Mr McNamara said that in his discussions with Mr Maloney, he was told the DDDA owned land on the south bank of the Liffey which would enable it to procure a route for the Luas from the Point Village to the Irish Glass Bottle site.
He said he was also told the DDDA had held talks with the Railway Procurement Agency which had estimated the cost of this as being €60 million. The Davy investors have initiated proceedings in the High Court seeking the return of the funds given to Donatex, interest, and a “redemption premium”.
When they sought the money from Donatex on August 11th the amount involved was €93,319,803. When they sought it from Mr McNamara on August 19th, the sum had grown to €93,639,424. When they initiated proceedings on October 13th, the sum was €95,845,010. Interest, at 14 per cent, continues to mount.