A legal challenge to market distortion by NAMA.

[HanleyS]

This may be a bit premature but I'd be very interested in participating in a legal challenge to NAMA on the basis of market distortion and it's effect on competition in the property market. I'd be interested in hearing from other parties interested in mounting such a challenge. This would be similar to the challenge mounted by Kerrynorth (I believe) and others (myself included) on thepropertypin.com to the governments last bailout attempt.

Government sources said yesterday the market value of the assets being taken over by Nama will be based on the underlying collateral, adjusted for the longer- term economic value in line with EU guidelines. This means that the value of the assets will not be calculated on the current very low property prices but will be calculated on a long-term valuation model. The legislation will not spell out a standard specific adjustment to the value of the “bad loans” as it will vary on a case-to-case basis.

Cabinet signs off on draft legislation to establish Nama - The Irish Times - Wed, Jul 29, 2009

The governments refusal to allow these assets be traded on the open market and at market prices in my opinion represents serious market distorition. The challenge will be to show how they are breaking the law.

[Cael]

Its certainly worth a try. And I think everybody should join in the anti-Lisbon campaign as a way to bring down this robber government, before it bankrupts us totally.

[cactusflower]

In favour of the free market Cael? I would have thought you would have welcomed the State becoming the largest owner of development lands on the island.

[HanleyS]

I'd ask that the thread don't get derailed but I know it's futile.

NAMA must be stopped by hook or by crook. No holds barred in finding a way to block it. It's just a pity it doesn't threaten any endangered snails or anything like that.

[seabhcan]

This may be a bit premature but I'd be very interested in participating in a legal challenge to NAMA on the basis of market distortion and it's effect on competition in the property market. I'd be interested in hearing from other parties interested in mounting such a challenge. This would be similar to the challenge mounted by Kerrynorth (I believe) and others (myself included) on thepropertypin.com to the governments last bailout attempt.


Cabinet signs off on draft legislation to establish Nama - The Irish Times - Wed, Jul 29, 2009

The governments refusal to allow these assets be traded on the open market and at market prices in my opinion represents serious market distorition. The challenge will be to show how they are breaking the law.

That is an interesting take on things alright. How about a complaint to the European Commission as a first step? NAMA is supposed to be modelled on Sweden's response to their crisis in the early 90's. But Sweden was not in the EU at the time. Such action may well be illegal under EU law.

[orbit]

I would have thought that pricing based on a more long term economic value, rather than current market value, is designed to make it harder to challenge legally. Under current constitutional provisions, the state probably couldn't compulsorily acquire the loans at market value. But, maybe the constitution should be changed to allow NAMA to do this on a once off basis. The amounts of money at stake is so large, no legal obstacle can be allowed to get in the way.

[seabhcan]

Under current constitutional provisions, the state probably couldn't compulsorily acquire the loans at market value.

Why? I would have thought it would be legally difficult to overpay. Might EU law will forbid overpaying for assets? It must be market distortion and an anti-trust issue.

Can the government exclusively overpay for Irish assets? Perhaps French and German banks have a right to tender and have their assets also bought for more than they are worth?

[kerrynorth]

NAMA is already challangeable to the Commission on prima facia evidence from ACC. ACC are taking there legal moves against various developers as they reckon they will be disadvantaged by NAMA by being a non-Irish bank as they are owned by the Dutch bank Rabobank. That information alone sets up a Competition challenge.

Also, a range of citizens could challenge the legislation Constitutionally on the basis the the legislation could impose an inordinate burden on taxpayers.

[seabhcan]

NAMA is already challangeable to the Commission on prima facia evidence from ACC. ACC are taking there legal moves against various developers as they reckon they will be disadvantaged by NAMA by being a non-Irish bank as they are owned by the Dutch bank Rabobank. That information alone sets up a Competition challenge.

Also, a range of citizens could challenge the legislation Constitutionally on the basis the the legislation could impose an inordinate burden on taxpayers.

Sounds good, and no time to lose!

Whats the first step?

[orbit]

Why? I would have thought it would be legally difficult to overpay. Might EU law will forbid overpaying for assets? It must be market distortion and an anti-trust issue.

Market distortion won't be the main legal issue imo, rather personal property rights as guaranteed by the constitution.

You can't force someone to sell you an asset that is currently undervalued, and which they might have a reasonable expectation that it will increase in value in the future.

I think the government should publish the legal reasoning behind what they are proposing with NAMA. The amounts of money are too large to hide behind the usual "legal advice" guff.