At a recent meeting of the Joint Committee on Finance, Public Expenditure and Reform, the Chairman of NAMA stated that NAMA remains as focused as ever on pursuing each developer for the full amount owed. He also explained that NAMA's minimum target is to recover what it has paid for the loans, plus any other moneys advanced as working capital or for development, plus interest on these moneys. This does not mean, however, that NAMA will stop at that threshold. Under Section 10(2) of the National Asset Management Agency Act, NAMA is required to operate so that it obtains the best achievable financial return for the State and that means pursuing all debts to the greatest extent feasible. It is important also to point out that the agency’s targets are based on the existing state of the property market. Overall, NAMA’s best estimate at present is that it will, at the very least, recover the consideration it has paid for loans, plus any additional funding it advances to preserve or enhance asset values. It aims to recover significantly more than that and the extent to which it can do so will depend largely on the performance of the Irish and UK economies over the next five to seven years. If the outlook for property improves as a result of economic growth, NAMA’s expectations for the realised value of the portfolio as a whole and for individual debtors will increase.
At the same meeting of the Joint Committee, the Chief Executive of NAMA pointed out that, having been through the business plans of debtors which account for close to 75% of NAMA debt, he does not consider that there is a ‘huge pot of gold' that can be recovered through legal proceedings to reverse asset transfers by NAMA debtors. I am informed by NAMA, however, that most of the debtors who engaged in such transfers are co-operating with it as regards a voluntary reversal of asset transfers. As negotiations are ongoing with many debtors and assets are being re-valued at current prices, it is not yet possible to determine the final valuation of reversed asset transfers. In a number of cases where debtors are refusing to co-operate, it has been necessary for NAMA to adopt an alternative approach, with the strategy varying by reference to the legal advice received in each particular case. This may involve the pursuit of personal guarantees through the courts and, in some cases, will require litigation to reverse asset transfers where the original intention appears to have been to place the assets concerned beyond the reach of NAMA, including transfers to offshore accounts.
