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Project Eagle vulture fund seeks to make TD Mick Wallace bankrupt

By Shane Phelan

Published 07/11/2016

Mick Wallace: The Independents4Change TD has been a vociferous critic of the €1.6bn deal under which Cerberus bought Nama’s Northern Ireland loan portfolio, Project Eagle, in 2014
Mick Wallace: The Independents4Change TD has been a vociferous critic of the €1.6bn deal under which Cerberus bought Nama’s Northern Ireland loan portfolio, Project Eagle, in 2014

US vulture fund Cerberus has petitioned the High Court to adjudicate TD Mick Wallace bankrupt.

The petition comes ten months after the fund secured a €2m judgment against the Wexford politician arising out of debts it bought from Ulster Bank.

The application was made this morning to Ms Justice Caroline Costello by barrister Eddie Farrelly, representing Cerberus’s Irish subsidiary Promontoria (Aran) Ltd.

The proceedings were adjourned until December 5 following an application from Mr Wallace's barrister Keith Farry.

Mr Wallace was present in court for the application. Wearing blue jeans and a dark blue shirt, he stood at the back of the courtroom as he waited for the application to be made.

"I'll deal with it the best I can. Life is too short to be worrying," said Mr Wallace after the brief hearing.

He was accompanied by David Hall, chief executive of the Irish Mortgage Holders Organisation.

The Independents4Change TD has been a vociferous critic of the €1.6bn deal under which Cerberus bought Nama’s Northern Ireland loan portfolio, Project Eagle, in 2014.

He has consistently questioned the sale price and raised concerns about alleged kickback payments. Cerberus has denied any wrongdoing.

Even if he is adjudicated a bankrupt Mr Wallace will be able to hold onto his Dáil seat.

A change in the law two years ago removed the prohibition on bankrupts being members of the Dáil.

Last January, Mr Justice Brian McGovern ruled that Promontoria (Aran) Ltd was entitled to summary judgment after finding Mr Wallace had raised no arguable defence to the claim.

He entered judgment for €2m, the maximum amount of Mr Wallace's liability under his guarantee of the debt of his construction company, M & J Wallace Ltd, and also awarded costs against Mr Wallace.

The judge granted a stay for three months on execution of the judgment order at the time.

Mr Wallace has been one of the fiercest critics of Cerberus's purchase of Project Eagle.

Claims of political kickbacks on the margins of that purchase are being investigated by the UK's National Crime Agency (NCA) and the US Securities and Exchange Commission.

Mr Wallace used Dáil privilege to reveal around Stg£7m linked to the deal had been deposited in an account in the Isle of Man. He alleged this was intended for a Northern Ireland politician or political party.

A former Nama official and a former Nama advisor have both been questioned by the NCA as part of its investigation.

Mr Wallace also spoke out in opposition to 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.

Earlier this year the TD set up a website called namaleaks.com, seeking to uncover “possible injustice and poor practice related to Nama and financial institutions in Ireland”.

He said last week that the website had received information about events in the North before 2013 relating to the sale and planned to outline details in the Dáil.

A report by the Comptroller & Auditor General Seamus McCarthy found Nama made a probable loss of around €220m on the sale, a finding rejected by Nama.

Today’s application is the latest in a series of financial setbacks for the TD, who also had a judgment for €19.1m registered against him and M&J Wallace Ltd by ACC in 2011.

The company was placed in receivership by ACC in May 2011.

Its assets included the Italian Quarter on Ormond Quay in Dublin and the Behan Square apartment complex on Russell Street near Croke Park.

The ACC debts arose out of five loans granted to M&J Wallace Ltd between 2004 and 2008, for which personal guarantees were given by Mr Wallace.

The construction firm also made a €2.1m settlement with the Revenue Commissioners in 2012, arising out of a failure to make full tax returns on apartment sales over a two-year period.

Irish Independent

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