Question re: bankrupt developers. Were they really broke?

Lumen

mariaalice wrote: »

...its an interesting moral argument does being married to someone mean you are responsible for their debts.

I dunno, people tend to deploy moral arguments when they don't like the legal ones, but the law is a social instrument whose purpose is to encode our morality for the purpose of administering justice.

Legally, the issue is what the debts are secured on.

I am not a lawyer, but as I understand it joint and several liability is a clause put into certain debt contracts (particularly those secured on the family home) in order to override the legal protection afforded to that family home. There's no point in securing a loan on a property is the lender has no recourse to that security.

davo10

Lumen wrote: »

I dunno, people tend to deploy moral arguments when they don't like the legal ones, but the law is a social instrument whose purpose is to encode our morality for the purpose of administering justice.

Legally, the issue is what the debts are secured on.

I am not a lawyer, but as I understand it joint and several liability is a clause put into certain debt contracts (particularly those secured on the family home) in order to override the legal protection afforded to that family home. There's no point in securing a loan on a property is the lender has no recourse to that security.

What is your gripe with this?

If lenders or Revenue are entitled to assets of bankrupt developers, it's up to them to use whatever laws apply to recover as much money as possible. If they can't or won't, then there must be a reason for that. It doesn't change the fact that we, as a society, need more available accommodation and like it or not, experienced developers are the only ones who can obtain finance and get the houses built.

Lumen

davo10 wrote: »

What is your gripe with this?

I'm not griping, but the putting of assets beyond reach of creditors matters when those creditors are state-owned bailed out banks.

davo10 wrote: »

If lenders or Revenue are entitled to assets of bankrupt developers, it's up to them to use whatever laws apply to recover as much money as possible. If they can't or won't, then there must be a reason for that.

I'm not sure what point you are attempting to make with those statements.

davo10 wrote: »

It doesn't change the fact that we, as a society, need more available accommodation and like it or not, experienced developers are the only ones who can obtain finance and get the houses built.

Agreed. I have an entirely neutral view of property development as an activity. It's a necessary cog in the machine of a functioning society, much like amoral lawyers.

Time

Lumen wrote: »

I'm not griping, but the putting of assets beyond reach of creditors matters when those creditors are state-owned bailed out banks.

There's nothing inherently wrong about putting assets beyond the reach of creditors. It's a perfectly legitimate thing to do and tbh anyone with real wealth would be well advised to do so via trusts etc...

Lumen

Time wrote: »

There's nothing inherently wrong about putting assets beyond the reach of creditors. It's a perfectly legitimate thing to do and tbh anyone with real wealth would be well advised to do so via trusts etc...

Well, it may be fine or it may be very much not fine. Section 74 fraudulent transfer etc.

Time

Lumen wrote: »

Well, it may be fine or it may be very much not fine. Section 74 fraudulent transfer etc.

Thats why i said its not inherently wrong. Of course it can be used for fraudulent purposes, but lets be real here, do you not think these people all had legal advise before transferring assets beyond the reach of creditors.

Lumen

Time wrote: »

Thats why i said its not inherently wrong. Of course it can be used for fraudulent purposes, but lets be real here, do you not think these people all had legal advise before transferring assets beyond the reach of creditors.

Are you arguing that rich people always act legally because they can afford expensive lawyers to keep them on the right side of the law?

Didn't work out so well for David Drumm.

And I've lost track of where the Dunnes are at defending alleged fraudulent transfer of assets.

davo10

Lumen wrote: »

Well, it may be fine or it may be very much not fine. Section 74 fraudulent transfer etc.

You asked earlier what point I was trying to make with those statements, I thought the point was simple enough, if the developer commits fraud or breaks the law, he/she should be prosecuted. But if they aren't, then either they didn't break the law or th evidence isn't strong enough to support the charge. So why you insist on saying they committed fraud or siphoned off money without anything to back it up is beyond me.

Every business/person is entitled to use the laws available to protect their assets, if they don't break the law, why should we accuse them of fraud?

davo10

Lumen wrote: »

Are you arguing that rich people always act legally because they can afford expensive lawyers to keep them on the right side of the law?

Didn't work out so well for David Drumm.

And I've lost track of where the Dunnes are at defending alleged fraudulent transfer of assets.

David Drumm was convicted, as far as I'm aware the Dunne's have not been. But I don't think David Dunne is a property developer and I'm pretty certain he is not back in business here.

Heebie

NIMAN wrote:

Then how come no-one in a position of authority, or even a good investigative journo, isnt saying " hey hold on a minute fellas, where'd you get all that money".

An offshore bank that's any good doesn't let anything leak about their clientele. They wouldn't stay in business long if they did.

Lumen

davo10 wrote: »

You asked earlier what point I was trying to make with those statements, I thought the point was simple enough, if the developer commits fraud or breaks the law, he/she should be prosecuted. But if they aren't, then either they didn't break the law or the evidence isn't strong enough to support the charge.

There's a third option, which is that the matters are not properly investigated, perhaps because the State deliberately under-resources the agencies with the statutory duty to investigate.

https://www.irishtimes.com/news/crime-and-law/white-collar-crime-reports-going-unread-amid-endemic-lack-of-resources-1.1817109

davo10 wrote: »

So why you insist on saying they committed fraud or siphoned off money without anything to back it up is beyond me.

I haven't accused anyone of fraud, and you still haven't offered an opinion on whether it happened (I can't even be bothered to restate the question again).

Anyway, Ireland has a terrible/incredible international reputation for investigation and prosecution of white collar crime (depending on which side you're on).

I can't believe after all that's happened in the last 15 years that this is even a discussion point.

Eric Cartman

The reality is a bunch of limited companies went bust, mostly due to them not being paid and new work drying up, if there was no mismanagement then the directors of that company (the developers / builders) would not be at fault. So their personal house, savings, investments etc.. would have been safe.

At the time it would not be uncommon to take a directors loan from your company to purchase some land in your name and then have the company buy it off you after it was rezoned etc.. when the work dried up and demand fell, many property development companies were liquidated with massive debts unpaid etc.... while the directors of that company had their own homes paid off and sitting on lots of land that was now zoned residential or had planning on it, now thats worth a lot of money so a bank would gladly loan to a new company with a clean financial history that magically has a load of residential land worth millions on the balance sheet.

ted1

NIMAN wrote: »

listermint wrote: »

I don't think that's the point. If the average Joe went bust on his mortgage or debts that would be it. No ability to Syphon money anywhere.

There is truth in the old adage the more you owe the less you owe.

Thank you for understanding what I was trying to say. I wasn't saying I should be building houses.

My point is, these guys claimed they were broke. Penniless. Yet how does a businessman who had no money now find themselves building hundreds of houses again?

Surely there has to be someone in government circles who needs to ask these guys where they got the money to start buying land again and start building? If they had money hidden away, surely that fraud?

Some of them are experienced developers who are well able to make a good profit as such they get external funding from private sources or direct from Nama.

Takes cairn homes. , https://www.google.ie/amp/s/www.irishtimes.com/business/construction/cairn-homes-secures-50m-loan-for-montrose-site-purchase-1.3144013?mode=amp

And in this you see the money is for the state https://www.google.ie/amp/s/amp.independent.ie/business/commercial-property/how-taxpayerbacked-fund-gave-50m-loan-to-buyer-of-rt-site-35900685.html

Time

Lumen wrote: »

Are you arguing that rich people always act legally because they can afford expensive lawyers to keep them on the right side of the law?

Didn't work out so well for David Drumm.

And I've lost track of where the Dunnes are at defending alleged fraudulent transfer of assets.

No I’m saying that just because you put your assets beyond the reach of creditors, it does not mean you any inherently doing anything wrong and It is financial prudent to do so in many scenarios where there would be absolutely no question of it being fraudulent

riclad

House prices went down by 50-60 per cent in 2007,
so many builders owed the bank more than the houses were worth .
So they went bankrupt or else were taken over by nama.
if someone was scammed it was the taxpayer who has to pay for the banks to be rescued anmd we are still paying off the debt for all this.
Meanwhile many civil servants and bankers retired with large pensions
and the bankers still kept the bonus,s they recieved in the boom for their
reckless lending .
AS usual the public and the tax payers pay for the reckless folly
of foolish bankers and mediocre civil servants.
Society needs builders ,the system of bankruptcy is there to allow
people to start over when theres a crash or people make mistakes.
Its a shame so many people had to go to the uk to do it in a time less than 7 years.

jimmycrackcorm

People don't see the connection between the hatred of developers and the fact that we have a housing crisis.

And everyone who bought an overpriced house doesn't think they played a somewhat minor part in it.