RELATIONS BETWEEN The National Asset Management Agency and developers Ray and Danny Grehan broke down last week after the agency asked them to sign up to about 35 legal documents improving security on debts of about €650 million as a condition of the agency funding the completion of a hotel extension in London.
The agency asked Ray Grehan to agree to renewed personal guarantees and additional legal charges over personal assets, including his family home, and the properties owned by his company, Glenkerrin, last week.
The additional security was sought ahead of the agency agreeing to provide further financing to complete an extension at the Crowne Plaza Hotel in Shoreditch, east London.
The Grehans sought legal advice before signing.
Nama appointed statutory receivers Michael McAteer and Paul McCann of Grant Thornton to properties owned by the Grehans and Glenkerrin over their failure to meet the terms of an agreement reached with the agency.
Nama had sought to improve the security on loans where it believed there was inadequate documentation covering the debts and to add further loan charges on assets owned by Glenkerrin and the Grehans if it was providing further finance to the company.
The Grehans’ opposition to the Nama’s proposed appointment of former Bank of Scotland (Ireland) executive Harry Slowey as non-executive chairman of Glenkerrin also contributed to tensions between Nama and the Grehans.
Nama sought to install Mr Slowey as a non-executive board member of Glenkerrin earlier this year to strengthen management and to have a representative on the company’s board.
The Grehan brothers opposed the appointment, which was never formally ratified by Glenkerrin’s board. Calls to Mr Slowey were not returned yesterday.
Spokesmen for Nama and Glenkerrin had no comment to make.
Nama has said previously that it would seek non-executive appointments to property companies so that it would be satisfied that they had “sufficient expertise at board and operational level” once the State loans agency approved business plans.
This is the first time that Nama has taken enforcement action against a developer with whom a business plan has been approved and a memorandum of understanding has been agreed between the parties.
The State agency is seeking the appointment of an administration to seize control of assets in the UK.
