Developer bids to stop NAMA calling loan

DEVELOPER David Daly and his children have taken legal proceedings aimed at preventing the National Assets Management Agency (NAMA) insisting on repayment of their €457 million loans with AIB or the appointing a receiver over properties.

Michael Cush SC, for David, Joanne and Paul Daly, secured permission from the High Court yesterday to serve short notice of their proceedings on NAMA, the state and AIB.

Mr Cush said the Dalys’ case was that they were meeting all their loan obligations, but NAMA had taken the view that these were demand facilities which could be called in any time. NAMA had done so on Wednesday and given the Dalys until close of business on Thursday to repay all loans, he said.

Mr Justice Garret Sheehan told counsel he could serve short notice of his application on the defendants and returned the matter to Monday.

The Dalys are seeking a declaration that credit facilities entered into by them with AIB in July 2007 and February 2008, which were transferred to NAMA last year, are not repayable on demand.

They claim NAMA’s decisions to demand repayment of the facilities on or about June 22 and June 24 is unreasonable, disproportionate and contrary to their constitutional rights.

David Daly, of Malahide, Co Dublin, said the plaintiffs wanted to stop NAMA taking any steps to seek repayment of the plaintiffs’ credit facilities with AIB and/or to enforce any obligations related to those facilities, including the appointment of a receiver.

Mr Daly said that, from 1995, when he established Albany Homes, he was concerned to involve his family and share his wealth with them. Since then, property assets was purchased in the names of his two children so as to increase their wealth.

This case concerned the plaintiffs’ personal facilities with AIB, on foot of which €457m is currently outstanding, he said. From the outset of the relationship with AIB, the investment strategy was that loans would be repaid out of rental income, and AIB had fully supported that strategy.

Despite the difficult financial conditions over the last three years, cash flow projections up to 2020 were, “broadly speaking”, being met, he said. These had anticipated a payment of €210m being made on the proposed liquidation of his interest in Albany in January 2014 (through the sale of his shares to his children) and the further reduction in the level of debt over time through rent payments.

Mr Daly said all their loans were fully performing, all interest is being repaid, there had been no breach of covenant and they were fully tax-compliant. AIB, he said, had told him it did not want their loans transferred to NAMA.

While that transfer did occur in July 2010, he was not concerned at the time, because none of the loans were impaired.

In November 2010, it became clear to him a NAMA document provided for the liquidation of the plaintiffs’ property assets.

Had he known that was proposed, the Dalys would have objected to NAMA acquiring their credit facilities.

Enforcement of the AIB loans would have “disastrous consequences” for the plaintiffs who were not responsible for AIB’s difficulties, he said. The fact NAMA’s demand had already received publicity was also likely to damage the plaintiffs, who were not the source of that publicity, he added