Treasury Holdings co-founder Richard Barrett will get some €5 million cash "with no strings attached" under a proposed settlement of a legal action brought against him and co- founder John Ronan over a controversial €20 million transaction, a High Court judge has noted.
That was "a lot of money for a defendant against whom there is an allegation of fraud", Mr Justice Peter Kelly remarked. The €5 million, he was told, included a €4.8 million "success fee" for Mr Barrett related to agreements on disposal of various shareholdings held by him.
The judge said he was “not a rubber stamp” and wanted to think about the matter before deciding whether or not to sanction the proposed settlement. He will give his decision next Wednesday.
Complex settlement
Mr Ronan is expected, arising from his proposed retention of a shareholding in Treasury Asian Investments Ltd (Tail), to get a similar sum under the complex settlement put before the court for approval yesterday by the official liquidators of the company and the National Asset Management Agency, Treasury's largest creditor.
Nama is owed an estimated €1 billion by the insolvent developer, having acquired that amount of its €2.7 billion loans in 2011.
The proposed settlement of the case over the Tail transaction, involving the alleged disposal of a significant asset of Treasury at a significant undervalue, was reached after lengthy negotiations and would bring €47 million into the liquidation, said Rossa Fanning for the liquidators.
The liquidators, the company and Nama are all plaintiffs in the action against Mr Ronan and Mr Barrett over the Tail transaction of March 22nd, 2010, in which €20 million shares were allegedly transferred out of the group to the benefit of Mr Barrett and Mr Ronan for €100,000 and unsecured loan notes. Treasury was initially also a defendant but, after it was wound up, became a plaintiff.
The plaintiffs claim there was no commercially valid reason for the Tail transaction made when Treasury was either insolvent or in very difficult financial circumstances. The claims are denied and the case was listed for hearing in October.
Yesterday, Mr Fanning said the liquidators believe the proposed settlement would realise more for the liquidation than a victory in the action. The agreement addressed not just the Tail transaction but also addressed another transaction, he added.
He was referring to the Manco transaction, alleged by Michael McAteer, one of the official liquidators, to be linked to the Tail transaction, and involving a sum of €2.26 million. It is claimed the Manco transaction was carried out on August 24th, 2012, immediately before the winding up petition was presented for Treasury. Mr McAteer said his investigations into the transactions included trips to Singapore and Shanghai.
