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NAMA sought resolution unit as part of wind down

By April 9, 2024No Comments

The State’s bad bank asked the Government to set up a ‘NAMA resolution unit’ because there was no way they could finalise all legal cases, insolvency, and property disposals before their official wind-up at the end of 2025.

NAMA is due to be shut down at the end of next year but informed the Department of Finance it will still have property on its books as well as outstanding litigation.

It told the department a resolution unit could potentially operate as part of the National Treasury Management Agency (NTMA) to manage the last of its business.

In an update for the Department of Finance late last August, NAMA said it faced seven key challenges in finishing its work by December 2025 as they faced significant pressure to sell off the last of their assets and manage debtors.

NAMA said they were facing considerable difficulties in retaining staff with a “broad set of skills and expertise” as employees were leaving knowing their jobs were soon to disappear.

The asset management agency also said there was limited scope for them to resolve litigation where it was the defendant.

“Therefore, it is possible that some cases may still be unresolved by end-2025. There is the potential for new litigation to emerge and must be resolved,” said the presentation.

It warned too of difficulties in wrapping up insolvency cases and that some were almost certain to continue after the date of NAMA’s closure.

It said: “The timing of [these] is controlled by bankruptcy trustees or the courts. There is the potential for new insolvency proceedings to be required.”

NAMA referred as well to “the resolution of some challenging cases that may require significant remediation activity and cost” that were not certain to be concluded.

The agency said also they were receiving a very high volume of queries on historical transactions and that there was no sign that this was slowing down.

The agency said they were concerned too that delays in changes to the NAMA Act to facilitate the formal wind-down would not be implemented in time by the Oireachtas.

The briefing said: “Recent evidence from the delay in implementing the required change to the LDA [Land Development Agency] Act to facilitate the transfer of the National Asset Residential Property Services demonstrates this possibility.”

In an overview of its loan portfolio, NAMA said it had around €500 million in debtor loans remaining including “largely complex assets” that required ongoing management and monitoring.

More than half the remaining land under their management is in North County Dublin, and 94% in total is in Dublin and the surrounding commuter counties.

It said there were challenges in “deleveraging” with changing market conditions and the “potential for assets to realise lower prices at a slower pace than projected”.

The briefing explained as well how there were many small holdings in the property portfolio which despite their size required “significant activity”.

On litigation, NAMA said it would continue to pursue settlement options but only where it was commercially advantageous.

They again warned of the risk of being seen as an “easy target” for legal cases because of the wind-down with a risk of “vexatious and costly new litigation”.

Asked about the records, a spokesperson for NAMA said they had nothing further to add to their contents.

Early last month, the Department of Finance announced they would proceed with plans for a resolution unit to manage any “residual activity” from the asset management agency.

Article Source – NAMA sought resolution unit as part of wind down – RTE

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