Rather a lot, and I mean €10’s of Billions, has been invested in ‘Syndicates’ run by the likes of Quinlan et al. Everybody who is anybody in south Dublin is in hock to one or the other of these scamolas. Some even ‘own’ Canary Wharf or the Savoy or suchlike.
Now the first recourse in an underwater syndicate is to the equity portion which is long gone. The bit that has not yet been sorted out is the recourse to the underwater portion of the loan. That is because these syndicates contain top 4 accountants and solicitors and barristers and bankers …or were friendly enough with bankers…to ‘influence’ the banks so that they did not call in the syndicate loans and crystallise the losses. They were important people, they got special treatment over the last 2-3 years. The Department of Finance ensured that it was so…whether Lenihan told them or not.
Many lived in hope that an asset bounceback would eventally cover these loans and possibly even restore some of their equity portion to health . That hope has gone. The IMF wants the banks, their loans to the syndicates, and the legal cases to sort any losses on those loans sorted, and within three years. The IMF wants resolution not fudge. They want their money back.
And in places where the old ruggery golfy chaps were able to put back the day of reckoning for the last two years …because of ‘who they were’ that hope is now finally gone. I remember listening to a fragment of a programme during the week when Joe Duffy spoke to a decendent of (John A Costelloe’s? … he spoke to a load of 1916 leader persons descendants) and who is herself a legal person and they said that vast numbers of solicitors and barristers were simply bankrupt.
And now the IMF will force our banks to make them finally so. I suppose that if one is to ‘shrink’ the domestic banks one must also shrink the parasitic auditorocracy and legal support teams that underpinned their antics.
While you may argue with the ‘bumper profit’, what is clear is that it will be possible for individuals to buy back their distressed loans for a fraction of the price they would have to pay in a bankruptcy proceeding.
Unfortunately the above is a classic example of the conspiratorial nonsense that passes for sophisticated analysis in these foolish times. Some factoids:
Most syndicates are non-rescourse, so unfortunately for adherents of the pub paranoid school it does not require any intervention from a shadowy DoF officials to ensure that once the equity is gone the participants can still walk. The reason they are non recourse is that the equity was often in the 20-30% region - pifflingly low leverage by the standards of the superstar Irish developer
Many of them are in reasonable income producing assets in the UK or the continent. They were purchased at inflated prices but they are continuing to service the debt in the meantime. On the 5 -7 year timeline that most of these schemes had the re-fis or exits will have to take place over the next couple of years.
Huge amounts of similar commercial property re-financing is due to happen all over the world in a similar timeframe. Many or most of the underwater investments that exists throughout the UK Europe and the US, only a tiny proportion of which is Irish owned by the way, will be re-fi’d on a ‘kick the can down the road’ basis, with interest roll ups, debt for equity swaps, profit participation and other conditions. Whether you think this is a good thing or not it will be common practice across the world and has nothing to do with Brian Lenihan / Portmarnock golf club / the Bilderberg group.
Most Irish schemes of the KPMG and MOP partner type are not in NAMA as the participants were not NAMA eligible. The Quinlan syndicates are the exception rather than the rule.
Although most are underwater some schemes including for example the Maybourne (Savoy Connaught Claridges) deal would be well above water.
But of course how naive of me - in a secret room somewhere in Fitzwilliam Lawn Tennis club even now a cabal of former Rock boys is meeting the alter the course of space and time and also force legislation to allow them to avoid horrific losses on badly times investments in Dutch office buildings. That’s how the world works 2Pack style…
Yes, agreed. Many of these guys have seen asset of €5m plus disappear but still have jobs and pensions so back to square one. Most are sanguine but moving on. It is a shame there is no longer a Dun Laoghaire GC to kick back in.
I am aware that these are performing for now, in the main.
What you are saying Aston is that when refinancing arrives in the 2011-1013 timefram there will be no recourse to the ‘investors’ for the portion that was leveraged off their 20-30% ( many borrowed their share of that equity but anyway) and that the total loss involved will be crystallised at refi time.
By our banks. That sort of explains the 3 year timeframe for resolution that is being discussed today.
The only syndicate that notably went looking for its money back was the syndicate that gave some mezz ( short term ) financing to Bernard McNamara to buy that Glass Bottle site with. That lot were big players and got burned for €5m each sorts of amounts.
Otherwise they have been very very quiet. Eeerily so in fact.