The High Court has ordered the joint trustees of Michael Bernard McNamara’s bankruptcy estate to transfer two investment payments to National Asset Loan Management (NALM), finding that undertakings given in 2007 created an equitable assignment of distributions from both investments.
In a judgment delivered on 5 May 2023, Ms Justice Eileen Roberts ruled that NALM was entitled to £73,193 linked to shares in First UK Commercial Property plc and £770,798 linked to the German Geared Commercial Property Investment. She also ordered the trustees to transfer a further €22,700, or whatever amount they held in relation to either investment.
The trustees had received the payments from Signature Capital in January 2014, after McNamara was adjudicated bankrupt in England and Wales. They sought declarations on whether the proceeds belonged to NALM under security arrangements or should remain in the estate for creditors. The court held that it had jurisdiction under the EU Insolvency Regulation to decide the dispute.
NALM relied on three forms of security. The judge found that a 2002 deed charging McNamara’s First UK shares did not extend to income such as dividends or distributions. She also found that depositing a certificate described as a loan note certificate did not create an enforceable equitable mortgage over the GGCP loan proceeds. The judgment noted uncertainty about the certificate’s legal effect and the absence of an actual loan note among the documents before the court.
The judge reached a different conclusion on two undertakings dated 11 September 2007. Signed by McNamara and by representatives of the investment controller companies, they instructed that distributions from the investments be paid directly to Anglo Irish Bank towards his indebtedness. The court held that the undertakings assigned existing rights to future payments to Anglo, NALM’s predecessor, and that the assignment covered the proceeds in dispute and the further GGCP amount.
The trustees had accepted that NALM could rely on the security documents and that the debt owed exceeded the proceeds at issue; those matters were not determined as contested issues. The court listed the case for mention on 18 May 2023 to settle the final form of order, address legal costs and deal with any further matters arising.