Written answers

Tuesday, 14 February 2012

Department of Finance

National Asset Management Agency

9:00 pm

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 149: To ask the Minister for Finance if the National Asset Management Agency continues to pay salaries to NAMA borrowers when NAMA has appointed receivers over their assets; if NAMA allows the NAMA borrower to recoup any rental income from assets where receivers have been appointed over their assets; and if he will make a statement on the matter. [7692/12]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 150: To ask the Minister for Finance the funds made available to NAMA borrowers from assets which are in NAMA to pay for the legal fees incurred by the borrower in attempting to prevent NAMA appoint a receiver over their assets; the number of borrowers in NAMA who have commenced proceedings against NAMA but continue to receive a salary from NAMA in accordance with their agreed business plans with NAMA; and if he will make a statement on the matter. [7693/12]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 151: To ask the Minister for Finance the number of borrowers in the National Asset Management Agency who have one or more performing assets in NAMA; if these NAMA borrowers are allowed recoup income from the performing NAMA asset as well as the salary which the borrower is receiving from NAMA in accordance with their business plans with NAMA; and if he will make a statement on the matter. [7694/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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I propose to take Questions Nos. 149 to 151, inclusive, together.

I am informed by NAMA that it does not pay salaries to its debtors. In certain cases, NAMA allows debtors to retain part of the income from their income-producing assets to pay overheads, including salaries. In other cases, such as development assets, NAMA will provide funding for overheads to enable works to be brought to completion, where this makes commercial sense.

On appointment, one of the duties of a receiver is to take control of the assets and any income produced by them will therefore no longer be available to the debtor concerned. NAMA informs me that arrangements which have been in place to allow income to be retained or to provide funds to meet overheads no longer apply after receivers have been appointed over a debtor’s assets.

NAMA informs me that its credit approval process requires debtors to obtain NAMA authorisation for expenditure. NAMA does not authorise expenditure by debtors on legal actions intended to prevent enforcement action. Nor does it authorise the retention of income in cases where proceedings have commenced.

As of end-September 2011, the percentage of performing loans in the NAMA portfolio was 21%. Debtors with performing loans make payments of interest and principal from their income-producing assets to NAMA and, in certain cases, they may also, with authorisation from NAMA, retain part of the income from these assets to pay overheads, including salaries.

NAMA advises me that the number of debtors who have one or more performing assets is not readily available. NAMA has undertaken to provide me with this information and, accordingly, I will issue a reply to the Deputy as soon as the information is to hand.

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 152: To ask the Minister for Finance the number of borrowers in NAMA who have one or more assets in NAMA that receives rental income from the State, a State owned entity or semi-State entity; and if he will make a statement on the matter. [7695/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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I am informed by NAMA that details regarding NAMA borrowers who have assets producing rental income from the State, State entities or semi-State entities are not yet available. However, NAMA informs me that the loan due diligence process is currently approaching completion and a database with detailed information on the collateral securing acquired loans, including lease arrangements, is in the process of being developed. The Agency expects to have the type of information sought by the Deputy later in the year.

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 153: To ask the Minister for Finance if he will detail the processes and procedures by which loans shall be assigned to any of the 16 loan sale advisers which have already been appointed by the National Asset Management Agency; the number of employees in NAMA who formerly worked for any of the loan sale advisers appointed on the panel; if he will name any of the loan sale advisers appointed for whom no NAMA employee has ever worked for; if he will detail the names of the loan sale advisors where NAMA employees have previously worked and will be directly or indirectly responsible to in the decision making process for determining which broker shall be appointed for which loan sale; and if he will make a statement on the matter. [7697/12]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 154: To ask the Minister for Finance if he will detail which month or quarter of 2012 that NAMA has targeted to sell on the US and European loans where they have appointed 16 loan sale advisers; and if he will make a statement on the matter. [7698/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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I propose to take Questions Nos. 153 and 154 together.

NAMA has appointed two panels of Loan Sale Advisors for both Europe (including UK) and the US to assist the agency in selling acquired loans that are linked to assets in those markets. There are 13 firms on the Europe panel and 10 firms on the US panel. Seven firms are common to both panels, which means that there are 16 firms in total.

NAMA informs me that particular loan sale assignments will be allocated following competitive mini-tenders within each of the panels.

NAMA advises me that there are some officers in the Agency who have worked for firms on one or both panels. NAMA also advises me that, given its remit under the NAMA Act, it must recruit staff with the requisite experience and expertise and that it would not therefore be possible to recruit officers who have not worked with firms on NAMA panels, particularly given the breadth of activities with which the larger law and accountancy firms are involved.

The key issue, however, is that NAMA takes steps to ensure conflicts of interest do not occur. Under Section 42 of the NAMA Act, before he or she is assigned to NAMA, each officer is required to provide a statement of his or her interests, assets and liabilities to the Chief Executive Officer of NAMA and the Chief Executive of NTMA. Furthermore, a key item for any NAMA evaluation group for procurement of services is a declaration by each member that they have no conflict of interest. NAMA advises me that this enables the Agency to ensure

* that potential conflicts of interest in the management of the loan portfolios are managed effectively; and

* that staff do not participate in decisions which may involve the allocation of work to companies for which they worked previously.

As regards the sale of US or European loans, NAMA will shortly begin the process of identifying certain segments of its loan portfolio for sale. NAMA advises that the volume and timing of actual sales will depend on whether NAMA considers that market bids represent good value for the taxpayer in any particular instance.

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 155: To ask the Minister for Finance the amount the National Asset Management Agency has spent on legal fees in total since its establishment; if he will provide a breakdown of the legal fees spent each year since its establishment; if he will provide a breakdown of the names of the top ten recipients of legal fees from NAMA each year since its establishment; and the amount these recipients received each year from NAMA. [7724/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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The details requested by the Deputy are set out hereunder. It should be noted that the details are on a cash paid basis as opposed to the accrual accounting basis that must be used in the Agency’s annual financial statements. It should also be noted that the figures for 2012 are those incurred up to 6 February only. Total Legal expenses by year (€)

YearBase Amount
20109,746,625.68
201116,455,532.56
20121,349,117.41
Total27,551,275.65

Top Ten suppliers to date (€)

1Arthur Cox3,074,552.86
2Hogan Lovells International LLP2,926,301.47
3Allen & Overy LLP2,473,941.32
4Maples and Calder2,046,545.39
5Matheson Ormsby Prentice1,577,475.09
6Byrne Wallace1,507,035.68
7William Fry Solicitors1,445,142.62
8A&L Goodbody Solicitors1,374,989.35
9Dillon Eustace1,189,329.74
10Beauchamps Solicitors1,166,591.81

Top Ten Suppliers by year

2012
1A&L Goodbody Solicitors324,087.32
2Hogan Lovells International LLP164,437.04
3William Fry Solicitors152,472.45
4Byrne Wallace114,664.76
5Beauchamps Solicitors68,014.10
6Simmons & Simmons LLP62,056.91
7Maples and Calder56,959.78
8SNR Denton UK LLP46,350.20
9Taylor Wessing LLP42,991.63
10DLA Piper UK LLP42.488.52
2011
1Hogan Lovells International LLP1,482,460.33
2Maples and Calder1,436,958.03
3Arthur Cox1,161,824.36
4Matheson Ormsby Prentice1,147,062.53
5McCann Fitzgerald1,030,955.02
6Allen & Overy LLP1,012,815.95
7A&L Goodbody Solicitors858,613.10
8William Fry Solicitors851,490.29
9Beauchamps Solicitors809,880.15
10Byrne Wallace787,574.42
2010
1Arthur Cox1,896,827.73
2Allen & Overy LLP1,424,973.95
3Hogan Lovells International LLP1,279,406.10
4Dillon Eustace708,632.76
5Byrne Wallace604,796.50
6Maples and Calder552,627.58
7William Fry Solicitors441,179.33
8Eversheds O’Donnell Sweeney424,198.20
9Matheson Ormsby Prentice407,353.51
10LK Shields Solicitors376,848.75

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