Construction company goes into receivership

By Stephen Rogers
SRogers.direct@examiner.ie

Saturday, November 13, 2010

ONE of the country’s largest building companies, McNamara Construction, has gone into receivership – putting a number of major construction projects around the country on hold and threatening the future of thousands of sub-contractor employees.


a d v e r t i s e m e n t


The company had been liasing with NAMA over a business plan which was rejected. It is understood the receiver, Farrow Grant Sparks, was put in place on Thursday night following the collapse of the plan.

Pat Harte had been doing work for McNamara Construction at the Tallaght Institute of Technology. He was due to receive €50,000 yesterday and was owed €200,000 in total.

"We are a sub-contractor doing all the groundwork on site since July. We have 95% of our contract complete, materials placed and the jobs done. The first half of my cheque was due today and I was talking to the quantity surveyor at McNamaras at 4pm on Thursday and he told me the cheque had gone through and that I would have money today. Then at 6.30pm he rang back and said the company had gone into receivership. We came up here looking for answers. The receivers had security on site."

He told RTÉ radio, with the receiver in place, the revenue bills and legal bills would be covered and sub-contractors would go to the bottom of the list when being paid the money they are owed.

Last night construction industry sources said they were not shocked Michael McNamara Construction was in difficulty – they said the only surprise was that it came so soon after the woes of Pierce Construction became public.

The source said the divide between construction groups who took the risk of building up extravagant property portfolios and those who confined themselves to contracting was becoming clear.

Martin Whelan, director of policy and research at the Construction Industry Federation, said the CIF’s immediate concern was for the sub-contractors exposed as a result of the situation MacNamara found itself in. While McNamara only had approximately 100 direct employs many more were employed by sub-contractors which it used to complete its projects. Among the developments McNamara is currently involved in are the humanities and social research and the science research buildings at NUIG, a medical block at Letterkenny General Hospital and the Point Village.

"We believe it would be absolutely wrong to generalise about the entire construction industry as a result of individual cases," said Martin Whelan.

He also called for support of the Contracting Construction Bill, introduced by Senator Feargal Quinn and progressing through the Oireachtas.

That bill would create enforceable stage payments to sub-contractors in a project allied to a quick, accessible adjudication system to deal with situations where there was a row.



This story appeared in the printed version of the Irish Examiner Saturday, November 13, 2010


Read more: Construction company goes into receivership | Irish Examiner

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McNamara's empire could collapse after Nama move

The Irish Times - Saturday, November 13, 2010

Agency’s decision to appoint a receiver could lead to other problems for developer, writes BARRY O’HALLORAN

THE STATE’S bad bank, Nama, may not stop with the appointment of a receiver to Michael McNamara and Co, the building business controlled by developer Bernard McNamara.

Late on Thursday night, Nama appointed Dublin firm Farrell Grant Sparks as receiver to Michael McNamara and Co, after finally rejecting its business plan.

While debts owed by McNamara himself and those of companies that he controls or in which he has shares are strictly speaking due from separate entities, Nama’s move could signal the end for both the developer and the businesses with which he is involved.

The agency requires all the businesses and individuals whose loans it buys from the five participating Irish banks to submit business plans detailing how they are going to repay those debts.

While this could mean that it will get different business plans from different companies and entities controlled by an individual developer, the agency still bears in mind that they are related.

If one plan fails to measure up, it will take into account the likely impact of that on the other, related, businesses and individuals. So if one goes, there is a good chance that the others could follow.

It is thought that this could well happen to the rest of the McNamara empire, spelling the end for a building business successfully established against the odds by McNamara’s father in Lisdoonvarna in 1948, and for the property development operation he himself has built.

McNamara stepped back from any involvement in Michael McNamara and Co earlier this year in a bid to spare it any fallout from his own personal problems.

These stemmed from his part in property ventures such as the €412 million purchase of the Glass Bottle site in Dublin’s Ringsend in 2007 and the €140 million purchase of the Shelbourne Hotel in 2005. As the lenders to these projects included Anglo Irish Bank, which, along with Bank of Ireland, also financed the building company’s activities, the secured property debts involved went to Nama, which wants them to be repaid in full.

When McNamara very publicly moved to step down from Michael McNamara and Co, he made it clear that he was doing so because he believed that it was viable.

Another element of his empire on which the banks are closing in offers a clue. ACC is seeking to have a receiver appointed to Radora Developments, the firm used by Mr McNamara and his associates Jerry O’Reilly and David Courtney for developing the Elm Park site in Dublin 4.

A related company, Raycastle, owed Radora €67 million at the end of March last year, according to company filings.