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Cerberus borrowers were not told of Tughans £7m work

Some debtors were not made aware that Tughans had previously carried out work on behalf of Cerberus. Picture by Hugh Russell

Belfast law firm Tughans did not disclose that it had previously worked for Cerberus when acting for debtors whose loans were taken over by the US investment company after it bought the Project Eagle portfolio from Nama.

The Irish News understands that some property developers in Northern Ireland, which had debts bought by Cerberus from Nama, subsequently used Tughans for legal advice when attempting to negotiate refinancing terms of their loans.

Some of these debtors were not made aware that Tughans had previously carried out work on behalf of Cerberus, according to two persons involved in refinancing negotiations.

It is understood from legal sources that Tughans would have analysed their position, and decided that they did not have a legal requirement to declare their previous work.

Tughans have declined to comment.

The Irish News understands that one Tughans’ client asked the law firm about its previous Cerberus work after hearing about it from a third party. They were assured that it would have no bearing whatsoever on the work being carried out them.

In September 2014, Tughans received a £7.5 million payment for its work carried out on behalf of Cerberus on the purchase of Nama’s Northern Irish loan portfolio. The fee was paid to Tughans by Brown Rudnick, one of the law firms representing Cerberus.

The integrity of the Nama loan book sale, known as Project Eagle, has since been challenged after it emerged that about £7m of this payment found its way into an offshore bank account controlled by the former managing partner Ian Coulter.

Claims have been made that the money was earmarked for third parties, including a Northern Ireland politician. The payment is the subject of ongoing police and parliamentary investigations.

Many property development groups in the north have already refinanced loans that were held by Cerberus, including Lagan Development (Holdings), which is jointly owned by brothers Kevin and Michael Lagan, MAR Properties, Paddy Kearney’s Kilmona Holdings and Gerard O’Hare’s Parker Green.

The Irish News also understands that Frank Boyd's Killultagh Estates is close to reaching an agreement with Cerberus.

As previously disclosed by The Irish News, Kilmona turned to Tughans for legal advice during negotiations with Jefferies Loancore over the purchase of their debt portfolio from Cerberus.

While Tughans' was representing Kilmona, the law firm was in the midst of a dispute with its managing partner Ian Coulter over the £7.5 million payment linked to the Cerberus deal.

He left the firm in January after discussions that had been ongoing since late November broke down.

A spokesman for Kilmona declined to comment.

Speaking earlier this year a Cerebrus spokesman said: “We are not and never have been a client of Tughans.

“We appointed Brown Rudnick as our lawyers. We were advised by them that they would be seeking local counsel support in Northern Ireland by Tughans and that they would be paying Tughans out of their fees.

“Cerberus has never paid Tughans. We want to make it clear that no improper or illegal fees were paid by us or on our behalf and we take any allegation to the contrary extremely seriously.”

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