Irish Section 110 SPV, Vultures, Tax Haven, Orphaning Scam

We are not sure. I have a feeling, post the public outcry, that we will find that they are now all the in-house Charities owned by law firms (i.e. Matheson’s Medb, Badb and Eurydice Charitable Trusts, and A&L Goodbody’s Arbutus Homeless People’s Trust).

Again, this is why I would suspect that we will find that the Charities involved are all in-house law firm Charities. The law firm partners might have signed additional separate side-letters / undertakings with the vulture to give the vulture additional protection if a partner went “rogue”. The US lawyers that the vulture firms use are incredibly thorough (can’t overstate this enough). They would not leave this to chance, regardless of what the Irish law firm would say.

You find in any society that when rules start getting broken and not prosecuted, that more rule breaking follows. We are seeing this with the rule changes the Revenue made to help the vultures get around Revenue’s anti-avoidance tax laws being used for Super QIFs (so Irish rich can get same benefit). The HSE is the biggest budget in the country (bigger than any plc or other). You will have seen that the HSE’s budget has been used to “leak” money out to 3rd party “Charities” whose CEOs and Boards dined out at tax payer expense. Perhaps the law firms saw this and thought, “what the hell”. Because we live in a “Godot Defense” society (my earlier post), this goes on everywhere. This is the price we pay for not protesting at anything, and enduring the “Godot Defense” every time (another) major Irish scandal gets put “on the long finger” for investigation.

This is the best thread I’ve read in a long time, absolutely fascinating. Deep thanks for your research observer35. Not least because I feel personally involved with a (performing) mortgage being paid to Mars Capital :angry:

Did you see an article in the Sunday Business Post a few weeks ago by Karl Deeter? It’s not online afaik, so I can’t link to it. He raised several issues, one of which was the unknowability of a company’s S110 status due to Revenue’s confidentiality rules, which you’ve answered with Mars’s own accounts (thanks). I spoke to a staff member of Mars Capital and neither they nor anybody else they had asked within the company had heard of it, although that’s not a big surprise.

Karl’s other main point was that the S110 status could be potentially jeopardised. It’s supposed to be a passive vehicle, but if it’s perceived to be “active”, for example, by pursuing mortgage holders through the courts, etc., then Revenue could revoke S110 status. Have you heard of that? From some of the material you’ve linked to, even it were the case, it would seem Revenue would be unlikely to do that given their tacit support for the whole scheme :imp:

I still have no idea what perceived benefit there is, to the country or just to FG, to allow it and possibly be directing Revenue, the Charity Regulator and other organisations to facilitate it :confused:

As an individual customer of Mars you are fine from a tax perspective… They have sought to overcome the tax residency rules by being owned by charities here to establish their Irish tax residency thank’s to Matheson and their inherent goodness. They must have inherited that from their previous Chair AJF.

For payments to companies such as Beltany Property Finance Limited, more difficult. PWC’s accounts mean you have no idea who you are paying the interest to if you are paying it to them so best to withhold tax and submit it to the revenue.

Then look at Carval’s vehicle, Launceston

It’s parent is not Irish - split between a couple of Lux-cos.

Assets less current liabilities 284,086,268

Interest Income 34,561,963

Tax 3,847,124

WHAT THE FUCK? THAT TAX? Someone fucked up, I mean KPMG are the Auditors and Matheson are the solicitors. Heads must be fucking rolling…

This makes no sense.

Fast forward to Note 7. What a fucking relief. No fuck-up. The actual tax charge in the current period was 500 (250 for the parent and 250 for the subsidiary). The charge is deferred tax - 3,846,624. That is how you spread tax timing differences that will never result in a tax payment.

Fucking hell. I really thought someone had fucked up there.

And eh. oh yeah, paying that crowd without deduction of tax is somewhat questionable…

I am going to have a drink and watch Jim Jeffries.

KPMG Auditor:


From the first page of your uploaded vulture Section 110 accounts on SCRIBID, you have shown that Matheson …
a.k.a. owners of 3 in-house “infamous” Irish Charities Medb, Badb, & Eurydice Charitable Trusts, as used by Vultures.
a.k.a. with a link with the even more “infamous” Mossack Fonseca, Panamanian law firm.

… are the lawyers to AT LEAST 3 of the 7 main vulture funds that have bought almost all NAMA / IBRC loans to date (and who will do the vast bulk of the +€20bn in Irish taxes avoided over the next decade), as shown on this link:

  1. Oaktree (a.k.a. Section 110 Mars Capital Ireland) - Matheson as Lawyer.

  2. Goldman Sachs (a.k.a. Section 110 Beltany Property Finance) - Matheson as Lawyer.

  3. CarVal (a.k.a Section 110 Launceston Property Finance, Vanguard series) - Matheson as Lawyer.

Are Matheson (and their three in-house “Irish Charities”), the main lawyers behind most of the vulture funds active in Ireland who have used the Section 110 (with all equity owned by an Irish Charity), to avoid +€20bn in Irish taxes?

(I can vouch for senior Dublin law partners who are disgusted at what has been going on, and who tell me their firm had nothing to do with vultures using Section 110s in the domestic economy. I didn’t really know whether to believe them, but perhaps Matheson are the main drivers here, with SFM & TMF as the main administrators / provider of “shell” Irish Directors).

Are FG really going to go to the mat on this to defend Matheson?

If you google, you will find loads of “formal” correspondence between Matheson and the Dept of Finance about tax structuring.

Is this why Matheson won 2016 Irish Tax Law Firm of the Year from the International Tax Review?

If Oaktree, Goldman or Carval (and potentially others) find out that their Irish tax-free vehicle is not really so tax-free (especially if FF get active here), they are going to want to sue someone very badly … very badly indeed.

There were a number of FG and Labour Ministers at the Matheson Christmas lunch in the Intercontinental last December

Putting it all together - Vultures + Vehicles + Lawyers + Accountants + Charity(s)
(with help from grumpy).

walk of shame for the big 7 vultures and their Irish advisors using Section 110 to avoid all Irish taxes on their Irish assets.


Mars Capital’s MATHESON (with 3 in-house Irish Charities Medb, Badb and Eurydice), A&L Goodbody (with in-house Irish Charity, Arbutus Homeless People’s Trust) and DILLON EUSTACE (have some complex Charity holding structure via CASTLEWOOD CS HOLDINGS) dominate this. POSTSCRIPT Only one small mention of biggest Arthur Cox (biggest legal firm and biggest legal advisor to State) and blood William Frys (who just do Deutsche Bank, really only a quasi-vulture). No mention of McCann Fitzgerald.


** Big 4 firms are all there - KPMG, PWC, **Deloitte **and E&Y, plus Grant Thornton


** Dominated by the Structured Finance Management or a.k.a. SFM

the list:

  1. Vulture: Oaktree Capital Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Mars Capital Ireland (and whole series of Mars No 1, 2, 3 & 4, and counting)
    Irish Charity who owns the Section(s) 110s: Medb, Badb, Eurydice Charitiable Trusts
    Origin of Irish Charity: MATHESON IN-HOUSE
    Irish “Shell” Directors: TMF
    Irish Law Firm: MATHESON
    Irish Accounting Firm: Grant Thornton
    Mars Capital AR
    Mars Capital B1

  2. Vulture: Lone Star Funds
    Irish Section 110 “Tax Avoidance” Vehicle(s): Whole series starting in LSREF iii (or LSREF ii), [small sample below]
    Irish Charity who owns the Section(s) 110s: Castlewood CS Holdings, in Trust for unknown final charity
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: [seem to have their own “dedicated” group that have worked across lots of LS funds]
    Irish Law Firm: DILLON EUSTACE (some A&L Goodbody)
    Irish Accounting Firm: E&Y (some Grant Thornton)
    LSREF II Acorn AR
    LSREF II Holly AR
    LSREF III Wight AR
    LSREF III Wight B1
    LSREF III Achill AR
    LSREF III Achill B1
    LSREF III Stone AR

  3. Vulture: CarVal Investors
    Irish Section 110 “Tax Avoidance” Vehicle(s): Launceston Property, Vanguard Property, Vanguard Auto, Stapleford Finance, Pentire Property Finance, Callington Property Finance, Emberton Finance
    Irish Charity who owns the Section 110s: [equity being held by Dutch Company - Irish Charity could be behind this]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: SFM
    Irish Law Firm: MATHESON / A&L Goodbody / Arthur Cox
    Irish Accounting Firm: KPMG
    Launceston Property AR
    Vanguard Property AR
    Vanguard Auto AR
    Vanguard Auto B1
    Stapleford Finance AR
    Callington AR
    Emberton AR

  4. Vulture: Goldman Sachs
    Irish Section 110 “Tax Avoidance” Vehicle(s): Beltany Property Finance, Kenmare Property Finance, Liffey (and others).
    Irish Charity who owns the Section 110(s): [equity being held by SFM - a big Revenue no-no]
    Origin of Irish Charity: [na]
    Irish “Shell” Directors: SFM
    Irish Law Firm: MATHESON
    Irish Accounting Firm: PWC
    Beltany Property AR
    Beltany Property B1
    Kenmare Property AR
    Kenmare Property B1

  5. Vulture: Cerberus Capital Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Large series, all beginning with PROMONTORIA, [very small sample below]
    Irish Charity who owns the Section 110(s): [equity being held by Dutch Company - Charity could be behind this]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: SFM
    Irish Law Firm: A&L Goodbody
    Irish Accounting Firm: PWC / KPMG
    Promontoria Eagle AR
    Promontoria Eagle B1
    Promontoria Avon AR
    Promontoria Chestnut AR

  6. Vulture: Apollo Global Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Tanager Limited (could be others)
    Irish Charity who owns the Section 110(s): Tanager Charitable Trust
    Origin of Irish Charity: [charity is actually based in Jersey, not Irish; lots of charitable causes in Jersey I’m sure]
    Irish “Shell” Directors: Sanne Capital Markets Limited
    Irish Law Firm: A&L Goodbody
    Irish Accounting Firm: Deloitte
    Tanager AR
    Tanager B1

  7. Vulture: Deutsche Bank (only a quasi-vulture)
    Irish Section 110 “Tax Avoidance” Vehicle(s): Havbell Limited (could be others)
    Irish Charity who owns the Section 110(s): Castlewood CS Holdings, in Trust for unknown final charity [same Lone Star]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: Deutsche International Corporate Services Limited
    Irish Law Firm: William Fry
    Irish Accounting Firm: Deloitte
    Havbell AR
    Havbell B1

All of the above Section 110s are paying:

  • annual Irish taxes of c €250 (there is the odd “glitch” where amount comes to €2,000), and
  • on Irish revenues in the tens of millions mostly pure interest “profit”, and
  • and have Irish assets in the hundreds of millions (and billions when added up for individual vultures).

Time for this again:

Outside of the Sunday Business Post, and the Independent Opinion articles from Stephen Donnelly and Paul Wyse, the Irish journalists reaction to this has either been:

(1) to swallow the Dept. of Finance line (it is a loophole, and Revenue are looking into it), or

(2) to defend the Dublin professional firms / Dept of Finance (Cliff Taylor, John McManus, Prof Eamonn Walsh)

Discussed here in more detail:

Those award ceremonies are like children’s parties. Everyone gets a party bag :smiley:

Anyone have a precise cost on the Herbert Street office disaster for the partners in MOPS? Not the shiniest buttons in the box :stuck_out_tongue:

I’m guessing at most the revenue will say don’t do it again…

Here is another set of incorrect accounts audited by PwC’s Ronan Doyle.

Cerberus vehicle re project eagle. You won’t find cerberus mentioned anywhere which is what makes the accounts dodgy :wink:

Interest income STG 111,765,822

Interest Expense STG 61,780,190

Asset Mgt fees paid to Dutch BV STG 31,183,054 (Yippee)

Profit STG 7,788

Tax STG 1,947

Gross Assets STG 1,187,774,740

How is this a Section 110??? No fucking idea.

How does one know it is Cerberus? … 82-bv.html

Sweet 8DD

Here are the accounts for a Carval entity, another 250 euro tax charge… purchased assets from NAMA. … 4-accounts

Interest income 8,098,958

Interest expense 7,144,271

Note on interest expense

No shit :laughing:

Tax 250

Assets less current liabilities 79,572,231

Auditors KPMG
Solicitors The great Arthur Cox

Another Carval entity - purchased a bunch of loans from Friends First…

Tax - yeah 250

Bit of theme here… another carval entity

Bought loans from IBRC. 250 tax.

Seems a bit strange taxation note. Looks like there is deferred tax but no note regarding it in the accounts. Not saying the accounts are dodgy but doesn’t read right.

OT but here are a set of completely wrong KPMG accounts - and a charittee :blush:

No cash flow as required by Cos act 2014 and they availed of the exemption under Cos acts 1963 to 2014.

Yeah I know…

Vulture Funds in Ireland
This new website and blog is run by David Hall & Stephen Curtis from the Irish Mortgage Holders Organisation.

Turlough Galvin, Head of Tax Group in Dublin Law Firm, Matheson (2nd largest in Dublin)
(a.k.a. lawyers at centre of Deputy Stephen Donnelly’s Irish Charity Vulture Fund Scandal).

At his day job in Dublin law firm, Matheson…

Winning 2016 Irish Tax Law Firm at “International Tax Review”, described to me as “Oscars” for euro tax lawyers…
(A&L Goodbody, other Irish law firm most prominent in working with Vulture Fund schemes, won it in 2015 and 2014)

Writing many (many, many) complex submissions to the Dept of Finance on all aspects of Tax Law…
(you can google the MOPS / Matheson submissions to the Department of Finance on

His own Biography claims that he was directly involved in drafting several pieces of Irish Revenue legislation…

His Tax Group has notes on dealing with the Irish Revenue, as this brochure for Irish tax avoidance quotes …
IRELAND: The SPV Jurisdiction of Choice for Structured Finance Transactions, by Matheson Tax Group (2013)

Ireland is not a tax haven.” (what a strange thing to say, reminds me of something Richard Nixon once said. however, if the next line doesn’t qualify Ireland as a tax haven, I don’t know what does …).

Through proper and careful planning the position can be achieved such that the SPV earns a minimal profit (there is no specified minimum amount required by [Irish] law) subject to the [Irish] corporation tax rate of 25 per cent.” (only a tax lawyer could write this. despite saying you can “structure” things to generate no profits, you want to quote the fact that that the tax rate is an onerous 25%. always one eye on the US IRS i.e. “we are not a tax haven”).

[NOTE this “25% tax rate” quirk is discussed in more detail here]

It is also important to note that although the SPV must notify the Irish Revenue Commissioners (Revenue) of its existence, no special rulings or authorisations are required in Ireland in order for the SPV to achieve this tax neutral status.*” (i.e. just in case you are worried about “regulation” or “anti-avoidance”, if you get any grief from Revenue, tell them I said to get stuffed and check their rules … as I wrote them. the lawyers are in control of this structure, not Revenue).

(*) tax neutral is “lawyer speak” for zero-tax, again, always one eye on the US IRS watching for evidence of “sham” structures.

On the Board of Matheson Foundation and its three identical unusual Medb, Badb and Eurydice Charitable Trusts…

Which Stephen Donnelly T.D noted in Dail being used to facilitate avoidance of €bns in Irish domestic taxes …

Turlough still finds time to brief other Irish Charities (i.e. Philanthropy Ireland) on “opportunities” …

And of course, catching up with “good friends” …

tune in next week for the A&L Goodbody Tax Law Team (who won the International Tax Review best Irish Tax Law firm in 2015 and 2014, before being upended by Matheson), and who, with Matheson, dominate the business of Vulture Funds using Section 110s to avoid all Irish domestic taxes on their distressed debt.

Is “BDO Ireland” the first Dublin professional firm to exit rapidly from the Section 110 Vulture Fund Tax Avoidance Scandal?

Dublin accountancy firm “BDO Ireland” have only just resigned from Section 110 Vulture Fund, Carval Investors 28th July 2016

It could not be due to fees, as “BDO Ireland” are one of the cheapest out there.

It could not be due to technical competence, as the Vulture’s Section 110 vehicles are so simple / easy to set up, they are almost comical (you just need the €40 CRO fee and 5 working days to make them). Section 110s only exist in a few lines of taxation legislation (TCA 1997) and are effectively unregulated (outside of normal company leglislation).

It could be KPMG (who do most of Carval’s Section 110s) cleaning up, however it is still a pretty unusual occurrence, and never an act you want to make as a client when there is so much heat and scrutiny you (I.e. hard to imagine Carval would take the step to kick off a smaller, but very (very) politically connected accounting firm, from their platform.)

Would it also be due to the fact that “BDO Ireland” is probably one of (if not the) biggest provider of professional “consulting” services to the State (via numerous departments), and can always be relied upon (like the ESRI) to reach the “right conclusions” on Government working groups?

“BDO Ireland” getting getting knocked off Irish State procurement lists for being involved in a scheme that helped foreign vultures avoid billions in Irish taxes from Irish distressed families, would put their business into administration in the morning (unlike Matheson, A&L Goodbody, KPMG, PWC, Deloitte or E&Y, who would carry on fine).

Probably better safe than sorry.

The reason, there is no human interest story, unless you pack a mother and her children in the back of a car after being evicted from their accommodation and tie that directly to the activities of the vulture funds it’s just a boring accounting issue so the SJW types in the Irish Times will leave it to the business journalists who will tow the line or “you’ll never eat lunch in this town again”. Since there are legal firms involved they can can be expected to deploy the comrade DiHoBi strategy which makes editors of newspapers with poor balance sheets very wary, in addition to the political calculations involved if this leads to another election.

Why do Matheson and A&L Goodbody dominate as lawyers for the Vulture Fund’s Section 110 structures?

We have seen from checking the filed CRO accounts of the vulture funds in Ireland (almost all of whom are using Section 110s to avoid Irish domestic taxes), that Matheson and A&L Goodbody dominate as their main legal advisers.

The “International Tax Review” (the most valuable industry prize), made Matheson the Irish Tax Law Firm of the year in 2016, and A&L Goodbody Irish Tax Law Firm of the year in 2015 and 2014.

They even both even have their own in-house Irish Charities (Matheson with Medb, Badb and Eurydice; while A&L Goodbody have Arbutus Homeless People’s Trust); Irish Charities are a key part of the Section 110 tax management plan.

Why have Matheson and A&L Goodbody come to dominate this area so completely?

Why are the other heavyweights Arthur Cox (biggest law firm in the country), and McCann’s and William Fry (the blue bloods), hardly around in this space (only seem to appear, if at all, in much smaller capacity)?

The answer is probably from a favor that the Irish Government did for these firms almost 20 years ago. After lobbying by major Dublin firms, the Irish Government passed the 1997 Taxes Consolidated Acts, from which Irish Section 110 structures where born. This was the Irish Government’s gift to the Dublin professional services firms to allow them to compete in the global securitization industry. There would be no tax revenue for the Exchequer, but it would be a boost to the Dublin services economy. As mentioned before, the Revenue either had the choice of spending 10 years to write the detailed leglislation to handle the rules for this very complex and diverse area, or do, as they decided, just write up some quick and simple rules that would meet the critical test - convince the US IRS that this was “real” leglislation, and accept it.

With this new leglislation (and some upgrades in subsequent acts), IFSC tax structuring took off. While some of the “traditional” established big Dublin legal firms like Arthur Cox and William Fry participated in it, it was Matheson (then Matheson Ormsby and Prentice, or MOP) and A&L Goodbody who dived in head first and came to dominate it completely.

Even though there was no tax revenues to the Irish Exchequer from the IFSC securitization market, there was a strong boost to the Dublin Services economy. Securitization is also a great artificial boost to Irish GDP (but without any “real” contribution). With Irish GDP inflated from securitization “fresh air”, it helped Irish banks to attract cheap financing programs from mainly German banks in the boom, who assumed Ireland was more solvent than it really was. From this was born the naughties property bubble in Ireland. Everybody was happy with their lot and off things went until the GFC.

In the GFC, the securitization market died in the IFSC. Huge securitization programs, and collapse of securitization financiers like Depfa Bank, brought the whole industry down. In addition, the market - now glass half empty - realised that Irish banks where hugely over-leveraged (vs. their GNP), and withdrew their roll-over financing. The end was swift.

During this bleak period for the “securitization” law firms like Matheson and A&L Goodbody (Arthur Cox was doing all right billing the State millions for advice on their various Irish Bank and EU bail-out programs) struggled. There were additional issues for individual partners who might have indulged in too much personal leverage during the boom.

In 2011/2012, as the foreign vulture funds arrived in Ireland to check the Irish carcass, they did the rounds of the Dublin law firms. The ones that really excited them, where those that came back with ideas on how IFSC securitization structures might be used to, legitimately, avoid all Irish domestic taxes on their Irish domestic investments. After all, these law firms had effectively written the relevant tax legislation for the Revenue in 1997 (and 2011) to create this industry.

There are believed to have been many meetings held between IFSC law firms, vultures, and Dept of Finance about this. Eventually, Revenue (was convinced / told) to bless it. From 2012, vultures began to use Section 110s in the domestic Irish economy, and would bid at NAMA, IBRC and other major loan auctions, with full Section 110 bid vehicles (whose equity was usually owned by an “Irish” Charity).

As I have pointed out, the Section 110s were so “alien” to the Irish domestic tax market that they would constantly run foul of various Irish anti-avoidance laws. The Revenue changed the Irish rules again and again to help ensure that the Vulture Fund Section 110 (equity owned by Irish Charities) were able to get around these rules:

**Now we have a situation where it looks like the vulture fund Section 110s (equity owned by an Irish Charity), of the clients of these 2 law firms, could legally avoid more in domestic Irish taxes (c. up to €20bn by estimates), then the entire IFSC has paid in total taxes over its lifetime (from both the securitization and the much bigger, US multi-national, segments) to the Irish Exchequer (both in corporate taxes and indirect taxes). **

As I have also pointed out, Section 110 schemes are remarkably fragile and can be taken down easily.

Given that FG / Noonan / NAMA are up to their necks in helping Vulture Section 110s, the question is whether FF (uniquely not involved in this Irish scandal), are up to taking on what have become the #2 and #3 largest law firms in Ireland?

IRISH TIMES: Are there now only three law firms left in the ‘big four’ Arthur Cox, Matheson, A&L Goodbody?

Remember, if the foreign vultures find out that they are NOT going to legally avoid up to €20bn in Irish domestic taxes over the next decade, then they are going to want to sue - very badly - the guys who advised them on this scheme in the first place.

Never in my life, did I ever expect to view FF as a ,major “underdog” in a fight in Ireland …

David with the Head of Goliath (Caravaggio), Vienna,_Vienna

Great work by you, Observer35 in keeping us clearly updated on this important matter.

Fianna Fail could sort this out easily, if they want to, but I’m not sure that they want to be involved.
The party is very well connected in many ways to the legal entities in the Financial World following the various actions that were going on at the time of the GFC whey they allowed the Banks to write the Bank Bailout legislation to suit the Banks, AND, when they allowed vested interests to write the NAMA legislation as a bailout for other ‘too big to fail’ vested interests.

The law can be used, as is, and if not as is exactly through appropriate changes to make sure that the vulture funds do get what is coming to them.

This wold take courage on the part of senior Revenue, DPP, Minsters, Cabinet, Garda Suichona etc. to get the message delivered so that either an appropriate amnesty/arrangment/etc. could be prepared (the easy way) or so that it can be set up to go through the legal channels so that with appropriate arrangements that Tax would be paid. I’m not sure if it would exactly work out if it went the court route but at least it is a pathway that could be described to the vultures if they are unwilling to pay a reasonable (corporate 12.5%) tax level.

My big worry is that there is no one either in the elected or non-elected government, either in power or supporting the current MINORITY government that is willing to rattle this for the public good.

No. Only plebs, the working poor, pay taxes in this country.

Everyone else lives off them.

That’s how it is.

I’m still waiting for Godot!

Dublin unit of US hedge fund with $8bn assets pays $125 tax … -1.2756124