High Court gives green light to Irish bank revamp

first_img Tags: NULL whatsapp Show Comments ▼ Ireland’s High Court upheld Ireland’s state-run “bad bank” structure, throwing out a legal challenge that had threatened to complicate the country’s recovery from financial crisis.Paddy McKillen, who co-owns Dublin’s Clarence Hotel with rock group U2 band members Bono and The Edge, had brought the first case against Ireland’s National Asset Management Agency to try and stop it acquiring around 2.1bn euros (£1.8bn) in loans secured on his assets.Lawyers for the Belfast man had argued that McKillen’s loans are being repaid and have no place in NAMA, which was established to take over Irish banks’ risky commercial property portfolios and draw a line under years of reckless lending that have brought the sector and the economy to its knees.NAMA needs performing loans to generate income, and a win for McKillen could have encouraged other developers to launch similar actions, cutting its cash flow and forcing a heavily indebted government to plug the gap.It could also have hampered a recovery in the property market with transactions put on hold while legal cases were pursued.“In summary, the court has concluded that the (NAMA) Act is a proportionate response to the very grave financial situation in which the state finds itself and which has particular relevance to financial institutions within the state,” said the judgement, read by the president of the Irish High Court, justice Nicholas Kearns.Lawyers for NAMA had argued that the central bank, the financial regulator and the European Commission all deemed McKillen’s loans a sufficient systemic risk to merit their inclusion in NAMA.They also argued that the loan-to-value ratio on some of his loans had been breached and he did not deserve special treatment.McKillen, the publicity-shy developer who hired Nobel prize-winning economist Joseph Stiglitz as an expert witness in the case, owns shopping centres, offices and five-star hotels in the UK, Ireland, France and the United States.His assets include London luxury hotels Claridges, the Connaught and the Berkeley.NAMA is acquiring loans with a nominal value of 73bn euros and the agency said in July it expected about a quarter of them would be income-producing.The agency is eying a profit of one billion euros over a 10-year lifespan but has warned it could also make an 800 million euro loss in a more “stressed” scenario.The government has said it would recoup any losses it makes on NAMA via a special levy on the banks.In September, NAMA Chief Executive Brendan McDonagh said the agency was in advanced talks to sell about 500m euros of assets with a view to repaying 20bn euros of loans by 2013.It has acquired nearly 40 per cent of the loans it has targeted and expects to conclude the bulk of the transfers by the end of the year.The hefty discounts, in some cases nearly three quarters of the original loan value, that NAMA is demanding on the assets it has acquired has upped Ireland’s overall bill for cleaning up its banks to potentially 50bn euros and triggered fears Dublin will need external aid to help manage its finances. Monday 1 November 2010 7:04 am Sharecenter_img John Dunne by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryMoneyPailShe Was Famous, Now She Works In {State}MoneyPailSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesElite HeraldExperts Discover Girl Born From Two Different SpeciesElite HeraldZen HeraldThe Truth About Why ’40s Actor John Wayne Didn’t Serve In WWII Has Come To LightZen Heraldmoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comTaonga: The Island FarmThe Most Relaxing Farm Game of 2021. No InstallTaonga: The Island Farm High Court gives green light to Irish bank revamp More From Our Partners Police Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgInside Ashton Kutcher and Mila Kunis’ not-so-average farmhouse estatenypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgMatt Gaetz swindled by ‘malicious actors’ in $155K boat sale boondogglenypost.comA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.org whatsapplast_img read more