Flight of the Wild Geese II
IT was in the dog days of August 2009 that Derek Quinlan upped sticks and struck out for Switzerland. The man known as King Midas said he was moving for âtax and personalâ reasons. A few months earlier, he had stepped down as chief executive of Quinlan Private, a vehicle that was to the fore in blowing the property bubble.
Now the time had come to leave dear old Ireland behind. It was a world away from the heady days of 2004, when a Quinlan-led consortium bought the prestigious Savoy Hotel in the heart of London. The day after the deal was done, one of the Irish-born members of staff raised the Tricolour over this bastion of the British establishment to let everybody know the hour of the Paddy had arrived.
âIt was put up without my knowledge,â Quinlan later said. âBut I cried. My poor father, who was in the Irish Army, would have loved to have seen this.â Unfortunately, the patriotism on display barely outlasted the property bubble.
Nobody better epitomises the illusory rise and devastating fall of the Irish economy than Derek Quinlan. Once, he was a master of the universe, assembling high net-worth individuals to buy major developments at home and abroad. And then, when everything went pear-shaped and the Irish citizen was tapped to pick up the bill, he took off to seek out new pastures. Where once the Wild Geese had fled from British rule on this island, Quinlan was one of the new geese, flying from a mess he and his fellow masters of the universe had been to the fore in creating.
Even more instructive has been his fate since the fall. Last month, it was revealed Quinlan is now living in London in some luxury. While the great unwashed pick up his personal âŹ200m bill to Nama, Quinlan resides in a period mansion where the weekly rent comes to âŹ4,100. He was also reported to be driving a new Range Rover which retails at around âŹ90,000. While he was exiled from his native land over the Christmas period, he managed to make do by hosting a bash in Londonâs Berkeley Court Hotel, which cost a reported âŹ12,000.
How he has managed to fund such extravagances while the citizens are paying his bills is a question for Nama. Over the last year, the agency has been flogging off some of Quinlanâs extravagant possessions such as his art collection. In the last few months the agency has hired 10
private investigators to look into the lifestyles of some of its leading borrowers. Quinlan fits into that category, but itâs unclear whether he will be subjected to a forensic investigation. The question on many peopleâs lips is how somebody with such enormous debts can afford to splash out on a lifestyle beyond the fantasy of average citizens.
Meanwhile, back at home, he is in a position to directly benefit from the misery of others. One of his companies, Tazbell, operates a contract for the Department of Justice in which it pursues people who have defaulted on court fines.
The company employs âpro-active contact attemptsâ with debtors, which includes âtraditional credit management methodsâ such as letters, phone calls and emails.
Quinlan is a shareholder in the company and his wife SiobhĂĄn is a director. If you fail to pay your TV licence, and donât promptly pay a court-imposed fine, Derekâs people will be coming after you.
Another element of Tazbellâs operation is the management of car parks, and collection on tolled motorways such as the M4 and M6. So if youâre not contributing to Quinlanâs coffers by failing to pay court fines, you most certainly are by paying tolls or parking charges. Meanwhile, you are also footing the bill he left with Nama, which falls back on every citizen of the State. Quinlan was born in 1948, the son of an Army sergeant from Co Kerry. He was educated in Blackrock College, where he also played second row on the schoolâs senior rugby team. Following that, he studied for a Bachelor of Commerce degree in UCD. He went on to qualify as a chartered accountant and worked for a number of years with the Cooper and Lybrand company, which is now part of PriceWaterhouseCoopers.
He came to the attention of the Revenue Commissioners, who headhunted him to work in its investigation branch. There he remained for six years, reportedly investigating highly complicated tax cases.
Having acquired serious experience in tax management, he left to set up a tax advisory business with another colleague, in which they advised clients on tax efficient investments.
In 1989, he moved onto a higher plane by forming Quinlan Private, an investment vehicle for high net-worth individuals. These vehicles became common during the years of the property bubble, but Quinlanâs was the first to be set up in the Republic.
The company was divided into three separate entities, Quinlan Private Capital, Quinlan Asset Management and Quinlan Private Clients. In effect, nearly all of the investors were private clients, the vast majority of which were drawn from the small pool of Irelandâs âhigh net-worthâ individuals.
The spiel from the companyâs brochure set out the application form to join this exclusive club.
âQuinlan Private Clients offers wealth management advisory services to high net-worth individuals and family clients. The cornerstone of our bespoke financial planning and investment advice is the creation, management and preservation of our clientâs wealth.
âQuinlan Private has a broad variety of private clients ranging from cash-rich but time-poor full advisory to investor-only clients. Our private client advisors, who have broad investment backgrounds, work closely with clients to understand and then execute a financial strategy that over time aims to achieve their financial goals, including the introduction to appropriate investment opportunities which match these needs.â
Translated in plain English, the pitch was simply, if you are rich give us your money and we will make more for you.
Through the 1990s, as the Irish economy grew into a genuine export-led, thriving example to all, many at the top of the heap began to find they had oodles of extra cash. Step forward Derek, with his wealth management advisory services. Quinlan Privateâs first investment was a modest ice cream outlet in The Square shopping centre in Tallaght, but he quickly graduated to the field of major development.
In 2000, he came to wide public attention by fronting the Nollaig Partnership, which bought the Four Seasons Hotel in Ballsbridge. By then, his touch was such that he could count among his partners AIB chairman Dermot Gleeson and property developer Mark Kavanagh. The consortium managed to write against tax all of the âŹ76m in capital costs for the hotel. In effect, they bought the establishment for less than it cost to build it.
Through the following eight years, Quinlan Private expanded its assets to the point where it claimed to have âŹ10bn worth of property âunder managementâ. Typically, the firm took 15% as its slice of the action.
Hotels and commercial buildings in Ireland, the UK, Europe and the US were all bought by the group. In 2005, when the Irish became the largest foreign investors in British property, most of the acquisitions were down to Quinlan-led consortiums.
The man himself kept a low profile. He enjoyed the lavish fruits of his business, but rarely sought out the media spotlight. Nobody could suggest he epitomised the brash, thrusting image beloved of some of his fellow masters of the universe.
He was reputed to boast that he had a core group of 50 or so investors on whose behalf he could write a cheque for âŹ10m each without even consulting them.
While he wasnât vulgar, he certainly enjoyed the high life. In a profile in the Property World magazine at the height of the bubble, he was described by one investor as âa man of few words who takes your money, goes off and doubles itâ.
Another client was full of praise, with one caveat. âOnce you put your money in, it can be tempting not to take it out again. Derek will always have another investment opportunity up his sleeve to put it in.â
Among his clients were the Riverdance millionaires John McColgan and Moya Doherty. Gay Byrne was another client, and Pat Kenny availed of Quinlan as his auditor. The Property Week profile described Quinlan Privateâs opulent offices on Raglan Road as follows: âThe stately building is home to 40 staff. In the private car park, only the latest Mercedes and BMWs are seen. The interior reflects a more contemporary side of Quinlan with its hardwood floors, modern art, and spacious hallways and boardrooms. Quinlan runs a tight ship and not much seems to happen without his say-so.â
The biggest symbolic acquisition of the Celtic bubble was that of the Savoy hotel group in London for ÂŁ750m. Quinlan led a consortium of Irish investors in acquiring the Savoy, Claridgeâs and the Connaught, all of which had long been bastions of the British establishment.
Such was the status of these Irish investors that they had beaten off competition from one of the worldâs richest oil sheikhs, Prince al-Waleed bin Talal of Saudi Arabia. The Paddies with their paper money and their alleged business acumen were now taking over from the oil sheikhs. It was as if God had moved swiftly to ensure that the descendents of the meek would indeed inherit the Earth.
The Tricolour was raised and the ghosts of the generations of Irish navies invoked to celebrate this new world order. With such pomp and ceremony did fate mock these masters of the universe as they celebrated their own brilliance at the height of the bubble.
Quinlanâs penchant for hotels didnât end there. In 2007, Quinlan Private bought the Juryâs hotel chain in Ireland and the UK for âŹ1.16bn. The deal saw the wider family of PV Doyle acquire serious money, which reputedly, most of them did not re-invest in property or bank shares, making them one of the few serious winners to emerge from the rubble of the property collapse. Quinlan also invested in the Clarence Hotel in partnership with developer Paddy McKillan and the U2 pair, Bono and The Edge.
By the time dark clouds began to gather on the horizon of the Celtic bubble, Quinlan Private had control over âŹ11bn worth of assets. In 2008, The Sunday Times Rich List estimated his personal wealth to be âŹ119m.
The man himself was ensconced in a Shrewsbury Road mansion that was fashioned from two period semi-d houses. And his fabled Midas touch was about to be lost to the harsh winds of change blowing across the Atlantic.
The future of the Irish economy was writ large by the summer of 2009, when Quinlan resigned as executive chairman of Quinlan Private. A month later, he relocated to Switzerland. By then, Nama was up and running, and within months Quinlan was one of the top 10 developers whose loans had been taken by the agency.
His debts of âŹ600m were thus socialised. Since then he has offloaded a major villa that he owned in Nice in the south of France, where he was a neighbour of Bono and The Edge. He was looking for âŹ150m for the property, but the crash saw the valuation plummet to less than half that amount.
A luxury yacht â a 102ft Falcon â that he had bought at the height of the madness for âŹ5m was repossessed, but only fetched âŹ2m. This exposed Quinlan to a court judgment against him for the âŹ3m shortfall.
He also put on the market a Manhattan townhouse, with an asking price of $37m. A plot of land he bought in Malibu with The Edge was disposed of. His former palatial residence on Shrewsbury Road had been flogged, and the former luxury offices on Raglin Road are also on the market.
As of yet, he hasnât been subjected to the indignity of having one of his vehicles repossessed, as has happened to other Nama developers. However, he did agree to the sale of his extensive art collection, which went under the hammer last autumn.
Despite his co-operation with Nama, he is still reputed to owe the guts of âŹ200m.
Yet recent reports suggest he is far from being on his uppers. His relocation from Switzerland to London suggests he is pursuing further business interests in the British capital, possibly with individuals whom he worked with on his way up.
Nama is investigating how some of its major creditors are managing to maintain luxury lifestyles, and the reports that Quinlan is living like a lord in London are likely to excite further interest in his case.
When he was King Midas, he didnât seek out the limelight. These days he is attempting to maintain that low profile, although he doesnât have to work as hard at it in London.
There is little prospect for now that Quinlan will return to this country to face the music. He still has business interests here, such as Tazbell, but there is no reason why he canât oversee his interests from abroad.
In this regard, he resembles nothing as much as the absentee landlord class of old. While he is no longer in a position to fly the Tricolour over a former imperial bastion like The Savoy, at least he can still afford to dine there, while the citizens back in the old country pick up his tab.
Itâs not just pastures new that is luring former masters of the universe out of Ireland. The Stateâs bankruptcy laws have also ensured that a slew of developers have relocated to Britain to declare bankruptcy.
Prior to the publication of a bill last month to update the laws in this country, a bankrupt was effectively out of business for 12 years. (This has been now reduced to five, with possible further reductions) This contrasts with the British law, where a bankruptcy can be discharged after a year, if the bankrupt co-operates fully with authorities and creditors.
In early January, it emerged that one of Namaâs finest, the Grehan brothers, had both filed for bankruptcy in Britain. The Grehans owe the national agency in excess of âŹ650 million through the Glenkerrin Group, which they owned.
The brothers developed apartments, hotels and fitness centres through the boom years. In 2005, they made the most expensive purchase of a property per square foot, when they bought the old UCD veterinary building Hume House in Ballsbridge for âŹ130m.
One of the downsides for strapped citizens is that the brothersâ move to Britain means Nama will not necessarily be first in line to get its hands on the Grehanâs assets.
Once a British court accepts that an applicantâs âcentre of interestsâ lies in that country, an application is usually accepted. The Grehans did develop a number of properties in Britain over the last decade.
Another developer to file for bankruptcy in Britain was John Fleming, who, until his relocation, was based in Cork. He was quick out of the traps, filing in Dec 2010. He handed over all his assets and was discharged last December. Many looked on Fleming as an example.
The man who developed the infamous Priory Hall in north Dublin, Thomas McFeeley, applied in January to be bankrupt in London. That application is set to be challenged by a woman who wants to bankrupt him in this State on foot of a âŹ300,000 judgement she secured against him for faulty work.
In the wake of the evacuation of Priory Hall, McFeeley was ordered by the High Court in Dublin to surrender his passport. He did so but travelled to Britain on a British passport, an ironic flight for a man who once went on hunger strike in Long Kesh, where he had been jailed for IRA activities.
Sean Quinn, while not a developer in the purest sense, also applied for bankruptcy in the neighbouring jurisdiction. He didnât even have to leave the island as he simply applied in Belfast. The court there rejected his bid, and he returned to the dear old Republic with his tail between his legs.
In July 2009, as Derek Quinlan was putting his Irish affairs in order, his kindred spirit, Sean Dunne, was laid low by a suspected bout of swine flu.
Dunner, known as the Baron of Ballsbridge, was due before the High Court for a case in which his former auctioneer was suing him for âŹ1.5 million. The swine flu had him in a grip, so he sent along his doctor to explain his issue.
A sample was taken to determine whether Dunner was really a victim of the swine flu, but the day before the results came back, Dunner and his auctioneer settled the action. The public never got to hear whether this master of the universe was the most high profile victim of the swine flu in the country.
He was certainly high profile in every other way. Two months after that court action, he and his glamorous wife, Gayle Killilea, also bid goodbye to dear old Ireland.
The couple relocated to the USA, leaving behind Dunnerâs large debts, which were picked up by Joe and Josephine Citizen.
Dunneâs parent company DCD is believed to owe around âŹ350m to Nama, while his own personally guaranteed loans top âŹ150m. He was in the second tier of developers whose loans were taken by the agency.
Dunner was everything a brash property developer should be when the Celtic bubble was being blown goodo. He moved easily through social and political circles, counting Bertie Ahern among his closest friends. He and Killilea met at the Galway Races, where both were high profile guests in the infamous Fianna FĂĄil tent.
When Ahern was invited to give addresses to the House of Commons and the US Congress, Dunner and his wife were among the small group of friends who accompanied him.
He acquired the moniker âBaron of Ballsbridgeâ after he purchased the Juryâs Ballsbridge site for âŹ475m at the height of the bubble. He often told the story of how he arrived at that figure, having asked his wife to think of a number between 50 and 75 when they were on holiday in Thailand. Gayle plumped for 75, the year of her birth, and Dunner phoned in the bid.
Finance for that proposed âŹ1.5bn development came largely from foreign banks, so it wasnât acquired by Nama. However, the banks involved brought a legal challenge against Dunne in December, which has now been settled. The previous July, Nama placed a number of his other ventures into receivership.
Last month, Nama began legal proceedings against the Baron to recoup the loans for which he had given personal guarantees.
None of it appears to have fazed Dunner. He now spends most of his time in Connecticut, where, according to court papers in another legal action, his wife has got involved in property development.
He also still runs the D4 budget hotels on the old Juryâs site, occasionally returning home to check on his investment.
On one such trip last December, he answered reportersâ questions with the quip: âNama has taken everything off me; Iâm in receivership, would you stop! Here, give me a loan, will ya!â
He claimed that he has had to emigrate âlike everybody elseâ.
He continues to live in some luxury in the Connecticut home, which is located in the heart of an exclusive development.
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