DEVELOPER Bernard McNamara has until 2pm today to try to reach an agreement with private investors owed €62.5 million by him under his personal guarantee of the borrowings of his company Donatex for the purchase of the Irish Glass Bottle site at Ringsend in Dublin.
At the Commercial Court yesterday, Mr Justice Peter Kelly agreed to a request by Mr McNamara’s lawyers to defer for 24 hours to today his ruling on whether to grant a stay on summary judgment for €62.5 million against the developer over unpaid loans made by the investors to Donatex towards the €412 million purchase of the IGB site.
The entering of summary judgment could expose Mr McNamara, whose companies employ over 1,100 people directly or indirectly, to claims by other creditors, the court has heard.
Mr Justice Kelly was due to rule on the stay application at the Commercial Court at 2pm yesterday, but was asked yesterday morning to defer his ruling to 2pm today to allow discussions between Mr McNamara and the investors who, through Jersey-registered company Ringsend Property Ltd (RPL), had secured summary judgment.
John Gleeson SC, for RPL, said it was Mr McNamara’s side who was seeking time and the investors – who include businessmen Lochlann Quinn and Martin Naughton – were agreeable to the matter being adjourned to today. In those circumstances, the judge agreed to defer his ruling.
When the judge heard the stay application on Monday, he was told Mr McNamara has conceded he had “no unencumbered assets” and was unable to pay the €62.5 million due to the investors under his personal guarantee of some of the borrowings of his company Donatex. Donatex itself was also unable to pay the €98 million owed by it.
Mr McNamara has offered to pay €100,000 per month off the summary judgment sums of €62.5 million against himself and €98 million against Donatex, which Mr Justice Kelly had last month ruled are due to the investors, procured by Davy Stockbrokers to invest in the €412 million purchase of the IGB site.
In opposing the stay, Mr Gleeson had described the €100,000 offer as “paltry” given the sums owed. He also said Mr McNamara was no longer a person of signficant net worth and his position was getting worse every day.
Counsel added that the investors were already down some €30 million as Donatex had no asset other than the IGB site contract.
In a letter read to the court, solicitors acting for Mr McNamara said “all of the equity in his personal assets has been utilised to support his various businesses and over 1,100 people that those business either employ directly or who earn a livelihood from them”.
The letter said Mr McNamara and Donatex “accept and acknowledge that they are unable to satisfy” the summary judgments pronounced in favour of Ringsend Property Ltd and added Mr McNamara was not “at this time” able to make any substantial payment in satisfaction of the judgment against him. The letter added the investors would benefit should Mr McNamara and Donatex win their court proceedings against the Dublin Docklands Development Authority arising from its failure to grant a certificate which would have had the effect of fast-tracking planning permission for the IGB site.
Last month, the judge found the investors were entitled to the summary judgment orders after finding the defendants had advanced no arguable defence, but he agreed to defer entering judgment pending the hearing of the defendants’ application for a stay pending their appeal against his ruling. The IGB site was bought by a consortium of the DDDA, Mr McNamara and another developer, Derek Quinlan. After planning permission was not obtained for the development within 30 months of January 2007, the investors claimed entitlement to their money.
The defendants argued their prospect of securing permission was partially frustrated because of a High Court decision in another case which, they claimed, meant the DDDA had no power to issue the Section 25 certificates in relation to a development with which it was itself involved.
