Nama ‘will be responsible’ for Dunnes losses

Dunnes Stores chief Margaret Heffernan has told Nama it will be held responsible for the “very significant losses” her company will “inevitably” experience if a petition to wind up the retail giant over non-payment of €21.6m for a Kilkenny shopping centre development is pursued.

Dunnes, which employs 18,000 people, is “robustly solvent” but unwilling to pay the money to Holtglen Ltd on grounds including the construction company’s insolvency, the Commercial Court heard yesterday.

Holtglen brought the winding-up petition after Dunnes failed to pay up.

Holtglen’s loans are now with Nama and the court heard Dunnes had been seeking to engage with the agency on the issue.

Dunnes, the court heard, also has concerns about the viability of the shopping centre at Ferrybank. Brian O’Moore, counsel for Dunnes, said Dunnes wanted talks with Nama; the interests of Nama and Dunnes were similar, and it made no sense and was a waste of time and money seeking to wind up Dunnes, he said.

In strongly worded letters to Nama chief Brendan McDonagh, Ms Heffernan described the Ferrybank centre as “an unmitigated disaster” and the winding-up petition as “an abuse of process”. It cannot be Nama’s belief that Dunnes is insolvent and that any petition to wind up Dunnes on grounds of insolvency is justified, she said.

Nama wrote to Dunnes on Oct 30 warning that, unless Dunnes paid €21.6m to Holtglen within seven days, Holtglen would petition to wind up Dunnes on grounds that it was unable to pay its debts and/or it was just and equitable that it be wound up.

Seeking to have the petition fast-tracked, Maurice Collins, counsel for Holtglen, said Dunnes has deliberately decided not to pay despite asserting it has capacity to pay and that was “a novel proposition”.

Mr Justice Peter Kelly agreed to transfer Holtglen’s petition to the court. He listed the petition for hearing on Dec 14. Last March, the judge granted summary judgment for €20.4m to Holtglen against Dunnes after upholding an arbitrator’s award to Holtglen arising from a 2007 agreement to build the centre for €37m.