There is a "fundamental illegality" at the heart of the position adopted by Nama in a dispute over the appointment of receivers to a Kildare hotel and leisure centre owned by companies of developers Ray and Danny Grehan, the High Court in Dublin has been told.
In 2006, Ray Grehan's Glenkerrin Homes purchased Windsor House in Belfast, which is not involved in the case, along with troubled P Elliott, the Northern arm of which faced a winding-up order in the Belfast courts this week. The companies paid around £30m for the multi-storey block in Bedford Street.
In court in Dublin, Mark Sanfey, for the Grehan companies, said that NAMA appointed receivers to run the Glenroyal Hotel and Leisure Centre in Maynooth when it was not entitled to do so.
The Grehan companies, Glenkerrin Properties and Glenroyal Leisure, are seeking orders from the court restraining Nama and receivers Paul McCann and Michael McAteer from acting or purporting to act as receivers of the business. They also want the court to compel Nama to instruct Mr McCann and Mr McAteer to desist from acting or purporting to act as receivers or managers of the business.
Nama and the receivers are opposing the action and say if the plaintiffs are granted the orders sought, it will undermine the value of the business.
The companies claim the receivers appear to be contemplating selling the businesses, but have not consulted at all with the directors of the companies about it.
It is claimed that Nama appointed the receivers on the security allegedly provided by the two companies to AIB under a mortgage deed of December 2002, which was later taken over by Nama. There was no power under that deed to appoint the receivers and their appointment is invalid, the companies claim.
In an affidavit from Mr McAteer, for the joint receivers, he said they accepted the receivership extended only to the mortgage deeds and the hotel liquor licence.
However, the reality was they were entitled to take control of the premises.
If the orders being sought by the companies were granted, this would lead to the immediate cessation of the business and undermine the value of the property, Mr McAteer said.
It was not in the interests of the plaintiffs or the defendants that this should happen, he added.
The case continues.