DEVELOPER Bernard McNamara is being personally sued for €96m by clients of Davy Stockbrokers over the now infamous purchase of the Irish Glass Bottle Site.

Mr McNamara, who last week launched a €140m action against the Dublin Docklands Development Authority (DDDA) over the terms of the mammoth property deal, one of the largest in Irish history, will “vigorously defend” the action.

Three years ago, a consortium headed by Mr McNamara, financier Derek Quinlan, the DDDA and a group of investors headed by Davy paid €412m for the 25-acre site in Ringsend on the south side of the Liffey, in Dublin. It is now valued at an estimated €60m.

Davy’s action, on behalf of private clients who loaned funds to the builder to invest in the site, has been lodged against Donatex, a McNamara company and a shareholder in Becbay, the company that ended up buying the land.

The legal action is also against Mr McNamara in a personal capacity — on the grounds that he provided a personal guarantee on the initial funds that private investors provided to fund his own investment.

The litigation is the single largest personal-guarantee action to seek entry in the Commercial Court and comes as the court prepares to deal with an anticipated wave of litigation arising from various tax-break schemes extended to the hotel and nursing home sectors. Davy investors will seek access to Ireland’s fast-track Commercial Court list on Monday morning.

The sum sought by Davy’s clients, the Channel Islands-based Ringsend Property Limited, dwarfs the €60m summary judgment order being sought personally against developer Liam Carroll by the Irish Nationwide Building Society.

It also exceeds the recent judgment secured by Anglo Irish Bank against troubled hotelier Hugh O’Regan for €37.5m — for personal borrowings and guarantees.

That was the largest recorded judgment to date against an individual in Ireland.

Exposure

Mr O’Regan will again come before the Commercial Court on Monday, where he is being personally sued for another €35m by Anglo on foot of personal guarantees provided to secure bank finance for his Morrison co-ownership.

Developer Paddy Kelly and Patrick Dunning, who operated Dublin’s boutique hotel, The Morrison, along with Mr O’Regan, are also being sued by Anglo although the extent of the personal exposure claimed in relation to the two men is said to be less than €4m.

- Dearbhail McDonald Legal Editor

Irish Independent

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COLM KEENA, Public Affairs Correspondent

Property developer Bernard McNamara is seeking damages and an indemnity from the Dublin Docklands Development Authority (DDDA) in relation to a deal where clients of Davy Stockbrokers are seeking to sue him for €95.84 million.

The case, which was admitted to the Commercial Court today, involves the former Glass Bottle site in Ringsend, which was acquired when a company called Becbay paid €424.34 million to acquire the site’s owner, South Wharf plc, in early 2007. The purchase price including €288.4 million borrowed from AIB and the now nationalised Anglo Irish Bank.

Becbay had three shareholders: Mr McNamara’s company, Donatex; the DDDA; and a company called Mempal Ltd, controlled by property financier Derek Quinlan. They put varying amounts into the deal being, respectively: €57.5 million; €32.2 million; and €46.3 million. Mr McNamara, as part of the arrangements made, signed a guarantee with Anglo for €41 million of the sum advance to Becbay, and for 41 per cent of all interest payable.

The equity put in by Donatex was sourced from private clients of Davy Stockbrokers, and was again guaranteed by Mr McNamara.

In his affidavit in the case Mr McNamara says that he was contacted by Paul Maloney, the then chief executive of the DDDA, in October 2006, and asked if he was interested in purchasing the Ringsend site along with the DDDA. Part of the proposition put by Mr Maloney was that the DDDA could fast-track any planning permission application for the site, by way of the powers assigned to it.

In October 2008 the High Court delivered judgment in a case called North Wall Property Holding Company Ltd and Sean Dunne vs the DDDA in which the court ruled that the DDDA was acting ultra vires in an arrangement similar to the one concerning the glass bottle site. Mr McNamara said this meant the DDDA was precluded from performing its obligations under the agreement he made with it concerning the Ringsend site.

Ringsend Property Ltd, which represents the Davy clients, has instituted proceedings in the High Court seeking €94.84 million from Mr McNamara and Donatex, with the sum comprising the principal amount, accrued interest, and a redemption premium, the Commercial Court was told.

Source: IrishTimes

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