A “FUNDAMENTAL illegality” lies at the heart of the position adopted by the National Asset Management Agency in the dispute over the appointment of receivers to a Kildare hotel and leisure centre owned by companies of developers Ray and Danny Grehan, the High Court has been told.
Nama appointed receivers to run the Glenroyal Hotel and Leisure Centre in Maynooth when it was not entitled to do so, Mark Sanfey SC, for the companies, argued yesterday. While there was a mortgage over the building, lands and hotel liquor licence, there was no charge over the business itself entitling Nama to appoint the receiver, he said.
Glenkerrin Properties Ltd and Glenroyal Leisure Ltd are seeking orders restraining Nama and receivers Paul McCann and Michael McAteer from acting as receivers of the business or its undertakings, custom, goodwill, fixtures, fittings, stock, bank accounts and book debts.
The firms claim the receivers appear to be contemplating selling the businesses but had not consulted the directors on this.
It is claimed Nama appointed the receivers in relation to security allegedly provided by the two companies to AIB under a mortgage deed of December 2002, which was later taken over by Nama.
There was no power under that deed to appoint the receivers and their appointment is invalid, the companies claim.
In opposing the application, Nama and the receivers argue the value of the business will be undermined if the orders sought are granted.
Opening the case before Mr Justice Daniel O’Keeffe yesterday, Mr Sanfey said there was no dispute between the parties that the AIB mortgages did not create a floating charge over the business and therefore there was no entitlement to appoint a receiver.
When a deadline set by Nama for repayment of the mortgages expired on May 3rd, the receivers appointed two companies to run the hotel and leisure centre, he said. While it was agreed the best option was to continue running the business, no explanation was given as to how the plaintiffs were to be compensated for the receivers taking it over, he said.
Michael McAteer, on behalf of the joint receivers, said in an affidavit that they accepted the receivership extended only to the mortgage deeds and the hotel liquor licence. However, they were entitled to take control of the premises.
If the orders sought were granted, that would lead to the immediate cessation of the business and undermine the value of the property, Mr McAteer said.
The case continues.
