Tuesday 25 October 2016

Wallace faces €2m bill to vulture fund at centre of Dail claims


Mick Wallace
Mick Wallace

Independent TD Mick Wallace is faced with having to pay €2m to a US vulture fund that he raised concerns about in the Dail.

A judgment for €2m was granted against Mr Wallace over his guarantee of a loan given by Ulster Bank to a company of his.

The loan has since been bought by US vulture fund Cerberus.

A three-month stay applies on execution of the judgment.

At the Commercial Court, Mr Justice Brian McGovern ruled that the fund which took over the Ulster Bank loan, Promontoria (Aran) Ltd, the Irish subsidiary of US fund Cerberus, was entitled to summary judgment.

He said the Wexford TD had raised no arguable defence to the fund's claim.

Mr Wallace was one of the fiercest critics of Cerberus' purchase of Nama's Project Eagle Northern Ireland loan book for €1.6bn in April 2014.

Claims of political kick-backs on the margins of that purchase are being investigated by the UK's National Crime Agency (NCA), the US Securities and Exchange Commission and a Stormont committee.

Mr Wallace had also opposed the sale of another Nama asset portfolio, known as Project Arrow, to Cerberus for around €800m, calling on Finance Minister Michael Noonan to suspend the sale until the NCA investigation was complete.

Yesterday, Mr Justice McGovern entered judgment for €2m, the maximum amount of Mr Wallace's liability under his guarantee of a €2.1m loan made to his company, M & J Wallace Ltd, and also awarded costs against the TD.

The three-month stay is to allow for the effect of an expected sale of a restaurant property at Dublin's Ormond Quay on Mr Wallace's indebtedness.

Earlier, Stephen Walsh, for Mr Wallace, sought a stay of three or four months on grounds of Mr Wallace's personal circumstances. The stay application was a plea for "the type of practical and sensible justice" operating in the courts.

Mr Walsh said ACC Bank has had a €20m judgment against Mr Wallace for four years and made "modest" recovery from that. If Promontoria thought it would "leapfrog" over ACC and "snaffle" some asset, it was "naive in the extreme" as there was "nothing" there to execute the judgment against, he said.

An application to wind up M & J Wallace, founded in 1970 by Mr Wallace's father, was for hearing on February 15. Mr Wallace had to direct his attention to that matter, which had emotional significance for him.

Mr Wallace will also be seeking re-election in the forthcoming general election, expected to be held on February 26, counsel said.


The TD may be "jockeying" in post-election negotiations and would be very busy up to and after February 26, he added.

Counsel agreed with the judge that the TD had to be re-elected first.

Mr Walsh said the best ground for a stay was because the expected sale of a restaurant property - the Taverna di Baccio - on Ormond Quay, on which the fund held security, would reduce Mr Wallace's overall indebtedness.

Paul Gardiner, for the fund, said this was a "very unusual" stay application and Mr Wallace had effectively already had a stay for three months.

The debt of the Wallace company will be reduced below €2m by the property sale, but the sale would not extinguish the debt, he said.

Wallace faces €2m bill to vulture fund at centre of Dail claims

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