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Nama lawyer 'shocked' at identity of firm involved in property portfolio sale

Published 25/10/2016

The National Asset Management Agency Treasury building in Dublin
The National Asset Management Agency Treasury building in Dublin

A senior Nama lawyer said he was shocked when he heard about the identity of a law firm involved in the controversial sale of a £1.2 billion Northern Ireland property portfolio.

US lawyers Brown Rudnick were advisers to American investment fund Cerberus when it bought the so-called Project Eagle portfolio from the Republic's toxic assets agency in 2014.

Alan Stewart, a senior solicitor for Nama who was involved in conversations leading up to the deal, said he only found out about Brown Rudnick's role a year later.

"Prior to the bid, the legal advisers Cerberus retained... were Linklaters and A&L Goodbody, two other firms," he told a parliamentary committee in Dublin investigating the sale.

"That is partially why I was shocked when I heard last year that Cerberus had retained Brown Rudnick, because I couldn't understand why they would have a need to retain another legal firm when they had two full service firms so active for them."

Brown Rudnick were involved in an earlier abandoned bid for the property portfolio by another US investment fund, called Pimco.

The Republic's spending watchdog has found Pimco pulled out of the sale after it discovered a "success fee" or fixer payment of £15 million - £16 million for three parties behind the scenes.

Pimco said the money was to be shared equally by Belfast businessman Frank Cushnahan, Brown Rudnick, and a managing partner of Tughans, a Belfast law firm subcontracted to assist in the deal, the Comptroller and Auditor general report found.

Mr Cushnahan was formerly a Nama adviser on Northern Ireland on the recommendation of the Democratic Unionist Party.

All parties involved have denied any wrongdoing.

Mr Stewart said Nama only learned about Brown Rudnick's involvement with Cerberus on the day the deal was closed, on April 3 2014.

Before Dublin's Public Accounts Committee, he said the agency had to be informed about a bidder's property and other advisers but he was not sure if this also applied to legal advisers.

Sinn Fein's Mary Lou McDonald said Mr Stewart's own notes from the time show that Brown Rudnick first approached Pimco about the potential sale.

Before seeing the notes, she said the committee was working on the assumption that Pimco, who was in the business of buying property loans, approached Brown Rudnick to act on its behalf.

"I find it very, very interesting that, in fact, it didn't happen that way," she said.

"That, in fact, Project Eagle was brought to Pimco by a firm of solicitors, high powered ones albeit.

"Why would Brown Rudnick be cooking up a concept like that?"

Mr Stewart said he did not know.

"To me, at no point have I ever had the impression that Nama was aware of this interaction between Pimco and Brown Rudnick at that time," he added.

Mr Stewart also told the committee he did not know how far back a relationship between Brown Rudnick and Belfast-based Tughans stretched.

The Project Eagle deal with Cerberus has been dogged by scandal for more than a year, including £7 million linked to it being found in an Isle of Man bank account.

Former managing partner of Tughans, Ian Coulter, resigned after it was unearthed.

The Public Accounts Committee is to question Cerberus and Northern Ireland's Deputy First Minister Martin McGuinness about the deal next month.

Press Association

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