Liam Carroll: I did it my way?

Re: Liam Carroll: I did it my way?

Postby garethace » Thu Sep 10, 2009 10:16 pm

I posted what is below, somewhere else yesterday evening. It is my definitive statement, which encapsulates most of what I have concluded with, in my thinking on NAMA. I stress, it is simplistic, reflecting only the views of a non-lawyer, non-bond trader, non-economist, etc. But I have found, it gets me by as far as my daily life goes. It is enough to allow me to 'move forward'.

I deliberately use the term 'move forward' in a sarcastic sense. I agree with what Fintan O'Toole wrote in his Irish Times opinion piece.

http://www.irishtimes.com/newspaper/opinion/2009/0908/1224254064758.html

Brian O' Hanlon

I stand to gain a lot more myself, working in the property area, if NAMA goes ahead. That is, if NAMA is a success and doesn’t break the country completely. Brian Lucey commented yesterday, that he is discussing NAMA in his sleep. Lucey said though, the definition of a ‘lecturer’ is somebody who talks in someone else’s sleep. Lucey might indeed, be talking in other peoples’ sleep at the moment.

But certainly, from my own perspective, I didn’t sleep too well this summer for some reason. Then it finally dawned on me. It does not sit well with me as a person, to think that I could support the NAMA plan. Since I have decided not to support it at all, in my comments and my own mind, I have slept a lot better. That doesn’t mean, if NAMA goes through, I will be disappointed. On the contrary, it could be good for me. However, disagree-ing with it, gives me more peace.

In order to disagree with NAMA, in my conscious brain, the really difficult work, was to find a sufficient number of points against NAMA, to tip that see-saw inside of my brain to either one or other side. I will proceed to describe the three things below. Brian Lucey in his latest Irish Times article, has hit on some additional factors, that I could agree with. They are things about bonds and what not, that economists do find interesting.

But the great thing for me, when I read Lucey’s latest article, was I realized, I don’t need his articles so much as I used to, to make up my mind. That, with the three basic ‘weights’ I have now placed on one end of my see-saw, I am happy that by brain is no longer under the same stress it used to be in, all summer. I don’t need to add additional weight to the see-saw to make a decision. Here they are.

(1) The FF government has commissioned numerous expert reports, none of which tie up together to form a cohesive strategy. NAMA in itself, is a wonderfully clever idea. Not to knock that idea, but it hasn’t been tied up with the rest of the consultant advisory projects. In other words, there is no clear overall architect. Which spells disaster to me.

(2) The banks are making their situation appear a lot worse than it is. They haven’t put their cards on the table. The AIB operations in Poland for instance, could be sold up to improve their position. They have not even gestured a willingness to look at that option as a last resort.

It is the same with the Zoe developments court case, the company I used to work for. They are careful to display only the portions of the company they want people to see, in the courts. I.e. In an attempt to say ’save us’, we deserve corporate wellfare.

(3) The €30 billion hit that ex. Ulsterbank economist Pat McArdle predicted the developers will have to take, in his article in the Irish Times newspaper. Pat called it, having some skin in the game.

I don’t believe the Irish developers ever had their own skin in the game to begin with. They were a miserable, impoverished bunch of guys, who never knew it was to have any real wealth. We won’t hold that against them, you are what you are. But NAMA hinges on the fact, that they were ‘real developers’ instead of developers of convenience the Irish banks needed in order to enlarge their loan books.

The three items above, are all that I really needed to make up my mind for good and glory about NAMA. I have read and listened to Gurdgiev, Lucey, Whelan, Burton, Bruton, Lee, Ryan, Lenehan and all the other excellent commentators to date. The list of people I know now, is far too long to list here. I know more Irish economists, journalists and politicians than I ever knew in my life, simply from following it all.

I don’t think I have purchased this many newspapers or watched the main evening news and studied as many blogs as I have, ever, as I have donevover the last 3 months. For what it is worth Greg, I have become a Fine Gael supporter. Even though, I never had a political opinion in my life. I used to go into ballot boxes and pick out a name basically. It was through listening to Fine Gael in particular over the past 3 months, that I really began to figure out how I felt about NAMA. For real. No more voices in my dreams thankfully.
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Re: Liam Carroll: I did it my way?

Postby garethace » Fri Sep 11, 2009 9:38 am

I agree with everything suggested by Sunday Tribune business journalist Neil Callanan on today's morning Ireland program.

http://www.rte.ie/news/2009/0911/carrolll.html

The important story this morning is that BOSI want to come into NAMA and become part of a 'third banking force' along with Anlgo Irish, Irish Nationwide, ESB and probably a 'spun off' Permanent TSB as IL&P focus back on insurance exclusively. Bear in mind, Permanent TSB have a fifth of the country's residential loan portfolio. A lot of assets.

In my own mind, I believe that BOSI wanted the securization of Liam Carroll's government rent roll, in advance of going into the British toxic banking asset container. Those 'guaranteed' Irish government rented buildings, would go a long ways towards improving the financial robustness of many a package of real estate loans. Similar to what NAMA is doing at the moment, in stress testing the Irish loan book, a government tenant is sure to improve the figures.

On the other hand, Liam Carroll took advantage of the cash earned from securitization of the said rent roll from the Irish government, in order to buy shares on the ISE. That was clever from Carroll's point of view, because it allowed him to 'broaden' the base of his collateral, which had been most land banks, with several charges already placed upon it by different lending institutions. The Irish shares were offered to the banks, in order that their own 'stress test' models could benefit from a broadened collateral base, and they could obtain the 'right figures' to allow them to extend Carroll additional credit.

What all of the above emphasizes, is the fact, that even though you can make the figures work to remain in whatever compliance in banking terms you require to be in, the plan can see be cock-eyed in the overall sense. Both on the borrower and on the lender end of the equation. This is what both justice Peter Kelly and justice Frank Clarke's decisions emphasize in my opinion.

Brian O' Hanlon
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Re: Liam Carroll: I did it my way?

Postby garethace » Fri Sep 11, 2009 7:26 pm

-

What of Royceton?

People often ask me, what was the purpose of including the Royceton company in the new petition for examinership in the High Court case involving six other Zoe group companies? I will go a bit further, and make this informed observation. I will tell you, I have looked at all the photos today in the papers. There is definitely something afoot in David Torpey's mind. The reason I say that, is because I know the following. The master plan in Royceton towards the end of 2008, was to launch out in a new direction. To become an all-in-one provider of construction expertise and services to clients other than Liam Carroll.

A new business plan

The business plan had a lot going for it. Because the construction operation has now become very complex and sophisticated. Much more than an average architectural consultancy practice is able to manage. We will not see advancement in the construction sector until we see the elimination of some the traditional techniques employed in construction. It is important to understand, that such changes are not welcome at all, by the encumbants of the Irish professional construction services sector. But why would that surprise anyone? We all know about Pharmacy, Dentistry and many other vested interests. Why should construction be any different? Especially given the fact, the Irish government is a customer for construction itself. I would certainly welcome the competition that Royceton would bring into the Irish marketplace. Indeed, I view the services of Royceton as a potential export product also. David Torpey has always been a keen follower of football teams such as Manchester United and Real Madrid. He is also a very avid League of Ireland supporter. David would like Ireland to compete in Europe and stake it's place. Like the inner city, shoe box apartment of the 1990's, by 2008 Zoe was starting to incubate a new disruptive innovation for the new mellenium. The trouble with the concept for Royceton working for clients other than Liam Carroll, is that Carroll himself disapproved of the plan.

Carroll was in the way

Indeed, as long as the Zoe group remained in one piece, insolvent or otherwise, the position of Royceton grew weaker and weaker. They were stuck being dependent upon a single man, Liam Carroll. That man was not batting on their side anymore. Royceton could have a chance if it was launched on it's own, but not remaining inside Zoe developments. This is why I believe David Torpey was smiling after yesterday's High court decision. Liam Carroll is decidedly out of the picture, and Royceton may find a new investor yet. I would not be one bit surprised if deals have already been drafted up. The purpose of including Royceton in the High court petition this time around, is to ensure that Royceton was ejected from the Liam Carroll empire sooner rather than later. In order to give it a chance to execute it's new business plan with new backing. To be honest, the Royceton guys are much too good to have lying around doing nothing. They are Ireland's best team and they need to re-take the field.

Being the centre of attention

Liam Carroll developed a great dislike for this plan. He was used to being the sole focus of Royceton's attention. The fact, he could not command their full attention any longer seemed to hurt him deeply. It wasn't the profit making side of property development that motivated Carroll. It was the constant attention and interaction he got with his old colleagues. Perhaps owing to the state of his health and enormous stamina, things began to get sour through the later part of 2008 and on into 2009. Liam Carroll had fed the Royceton team with work for a decade or more. He was no longer up to that task. David Torpey had been Carroll's draughtsman in Zoe from day one. What Carroll should have done, in the final years, was to give David Torpey an opportunity to be the best he could be. That would have been a fitting reward for many years of service.

Carroll and his team

The truth is, without Royceton, Liam might not have got far. Danninger, Carroll's beloved construction company, were not capable of getting by on their own. They imagined that they were independent and liked to walk all over Royceton, as they felt like it. All they had to do was make a phonecall to Carroll and he would reprimand Royceton. Towards the end however, Royceton directors felt more like adults being beaten with a wooden spoon. That on equal terms with Carroll, in trying to solve problems. There was love lost on both sides of that increasingly growing fence. The truth that Danninger did not appreciate, was that without Royceton they would be out of runway faster than they knew it. It is not easy to combine the construction culture with the desk worker culture in the one company. I was often accused at Royceton of taking too much of the Danninger side on matters. I happen to like the productive exchange between the two cultures. But I understand, that in today's context, construction really needs to become more professional.

How cheap is cheap?

To qualify all of the above a little bit, I would say the following. Having listened to Neil Callanan's interview on radio one, Morning Ireland this morning, I would agree - Liam Carroll was savagely under-cutting the market. Carroll would offer rates at 50% of everyone else, making the initial lease of his constructed properties a 'loss leader'. He then hoped to re-claim his costs and get into profit in the years that followed. That is, in the medium term. Instead, Carroll under-cut too much. He was badly caught out in the short term when credit stopped flowing in his direction. The point I want to make is the following. From the point of view of Royceton directors, they firmly believed in their minds, the reason they could undercut the market is they were so much more efficient than the rest of the construction industry. Certainly, they had innovated ways in which to save costs. I attempted to describe that in a Sunday Tribune article recently. But I think Royceton falsely believed that they could flex their muscles in terms of cost saving, enough to undercut the market by 50%. It is sometimes suggested that Zoe were the Ryanair of the construction industry. To that, all I can say is, you can believe too much of your own marketing waffle.

Pretending to be big

The other point I wish to make is this. Because Liam Carroll appeared to be such a large and powerful participant in the Irish property market, many consultant designers believed that Liam was a good client to have. Some consultants built their hopes entirely around Liam Carroll as their major client. But, it is easy for any player in the property industry to be a 'big player', if he can get away somehow with being insolvent. A lot of architectural consultants spent a lot of Carroll's money on construction over the course of the Celtic Tiger. They so enjoyed themselves, spending Carroll's money on construction, they convinced themselves they had a very sustainable source of employment in Liam Carroll. Which was a piece of bad judgement on their part. Similar to the way in which Fianna Fail, understood capital gains and stamp duties as a sustainable source of tax revenue. I did observe, Liam Carroll was able to fool people on two fronts. Both his own internal design team and his external design consultants were equally fooled in different ways, by Liam Carroll.

On to the super bowl

I do wish Royceton the best of luck, in anything they can salvage from the mess. It took a lot of guts to present the second petition to the High court for examinership. I believe that Torpey got the outcome he was looking for. His satisfaction did not go un-noticed by me, in the photos in the newspaper today. Whoever buys Royceton, will have bought the next super bowl team of Irish construction.

Brian O' Hanlon
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Re: Liam Carroll: I did it my way?

Postby garethace » Fri Sep 11, 2009 7:40 pm

Latest update from Justice Frank Clarke, by the Irish Times reporter, Mary Carolan.

Mr Justice Clarke said he did not agree with all that was said by counsel and nothing had been said to cause him to change his mind. He believed “a mistake” had been made but was not suggesting it was a deliberate mistake.


http://www.irishtimes.com/newspaper/breaking/2009/0911/breaking4.htm

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Re: Liam Carroll: I did it my way?

Postby Bricks » Mon Sep 14, 2009 3:46 pm

David Torpey has always been a keen follower of football teams such as Manchester United and Real Madrid.


Sorry for digressing from the main topic of your post but Dave Torpey absolutely hated Man Utd. and happens to be a very keen follower of Arsenal FC., so much so that he owned shares in the club and travels to see them play on a regular basis.
(I wonder how they are going for him).
He was once offered two free tickets for a Uefa champions league tie to see Man Utd play away to Inter Milan by a building supplier. Unfortunately for the genorous building supplier he couldn't understand why Dave slammed down the phone on him in a rage.

Back to your views of Royceton becomming an independant entity within the construction industry, I would have to agree with you. I think Royceton had a unique insight into the workings of a building site and I would be encouraged if Royceton had to opportunity to go down this road.
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Re: Liam Carroll: I did it my way?

Postby garethace » Mon Sep 14, 2009 6:56 pm

Bricks wrote:He was once offered two free tickets for a Uefa champions league tie to see Man Utd play away to Inter Milan by a building supplier. Unfortunately for the genorous building supplier he couldn't understand why Dave slammed down the phone on him in a rage.


I had a feeling it wasn't Man Utd he supported, but that makes it all the more fun, to spread mis-information doesn't it? I can't help taking the piss, I know he takes his soccer quite seriously, even more seriously than Royceton at times perhaps.

Back to your views of Royceton becomming an independant entity within the construction industry, I would have to agree with you. I think Royceton had a unique insight into the workings of a building site and I would be encouraged if Royceton had to opportunity to go down this road.


It is a legal minefield though, because so little control over the company was offered to the directors of the company by Carroll. That and the fact that LC would not allow new management in to challenge him. That is not to say that LC didn't hire people from time to time, to augment the team. They were very capable people at whatever level they became involved. But there was some element there missing - primarily in judging the 'capital structure' of the company, as it faced into uncertain economic times.

I believe that LC's impression of the financial side of a company was - nothing inside his company was ever going to adapt or change in any way - and likewise, in LC's brain, nothing in the external environment was ever going to change either to treaten in any way, the fundamentals of his plan. How does someone so big operate like that? This is why I always come back to the same old chestnut - arrogance, with filtered down throughout the lesser ranks, until it became lodged in everything, and how everything was done.

The trouble is, in the building industry, arrogance is one of those things you need to be successful. Without it, the best you could ever hope to be, is one those consultant architects who always take orders from guys such as Carroll. And seem quite content to take orders too. But arrogance, while it drove Zoe developments on to achievements, was at the same time sowing the seeds of destruction. If you get my meaning, one thing hiding behind another.

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Re: Liam Carroll: I did it my way?

Postby garethace » Tue Sep 15, 2009 9:49 pm

Once banks stopped lending, as they were forced to do earlier this year, the market collapsed. Developers were left holding properties whose rental incomes were a ruinously small fraction of their interest payments, and banks discovered that their collateral was worthless.


You know reading, an old Irish Times article by economist Morgan Kelly published two days before last Christmas, I could not help but agree with many of his observations.

http://www.irishtimes.com/newspaper/opinion/2008/1223/1229728473144.html

I mean, for heaven's sake, two days before Christmas. The government must have been relying on the fact, that most sane individuals would be more worried about their shopping. No one, except for the die hards of die hards could possibly raise much protest on a day like December 23rd. But Morgan Kelly sure did add his tupence worth. He did so again, as we know in the Zoe developments case. A well timed contribution it was also.

Indeed, much of what I went to the trouble to do at this particular Archiseek thread, has been to add transparency. That is a tall order, but maybe a little glimmer of light might peek through all of the dirt and scandal. I don't know. I read a very good comment by some journalist in the Irish newspapers this week - accountability, what is that anyhow? How is ever accountable for anything. We have been talking in Ireland about accountability for the last decade, and I am still not sure what it is supposed to mean.

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Re: Liam Carroll: I did it my way?

Postby garethace » Mon Sep 21, 2009 9:35 pm

Here is my Vietnam theory on the Liam Carroll case.

After doing some homework of my own, I have learned ACC bank were actively pursuing Liam Carroll to develop a lender's relationship with him. Why would they do that? There were obvious signs that a recession was in the pipeline. ACC bank were certainly not suffering from property fever, not by that late stage in the game. I don't buy it. So what else was on their minds?

Probably, ACC bank could see what was about to happen with property in Ireland. I would call it a kind of short selling - that is, ACC bank knew the defaulted loan could potentially buy a lot more of Carroll's empire, and that of other property developers within a short space of time. There was excess money in the system anyhow, so pepper around €100 million here and €100 million there, and who knows, out of it all, you might win the lottery.

(Those of you more skilled at trading than me, can inform me whether I should be thinking long or short in this case. Basically, ACC bank lend a nominal amount which in turn produces an asset of a larger potential value)

ACC bank could see distress coming down the tracks for both Irish banks and Irish developers. This isn't really a war between ACC Bank and LC. It is a war between ACC bank and other banks. LC and the north docklands is the Vietnam, Afganistan, Korea, Cuba or whatever you want to call it. The Prime Time feature is correct, the north docklands is 'Limbo Land', rather than NAMA land.

There appears to be a 'sub-text' in this Liam Carroll court case, that many of us find difficult to read. There is a lot about the current state of affairs, which we find difficult to grasp. Including the enormity of the problems themselves. Enormous, that is, from Ireland's domestic point of view. John McManus wrote something of interest in today's Irish Times.

http://www.irishtimes.com/newspaper/finance/2009/0921/1224254908745.html

It builds on some of the observations of economist Pat McArdle in last Friday's newspaper.

http://www.irishtimes.com/newspaper/opinion/2009/0917/1224254723373.html

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Re: Liam Carroll: I did it my way?

Postby garethace » Mon Nov 02, 2009 12:06 am

John Downes article in todays Sunday Tribune newspaper was a good read and John has thought carefully about the Zoe legacy to Dublin's built environment.

http://www.tribune.ie/news/article/2009/nov/01/a-to-zoe-of-liam-carroll-king-of-the-shoeboxes/

All together it was a very fair account written by a journalist with a keen interest in the social cross section of a city. As always I will endeavour to defend the in-defend-able, in keeping with the best traditions in journalism, or blogging, a form of seudo-journalism.

I was watching a documentary about Fleetwood Mac on the television this evening. There was one comment about a period in the bands life, when they fired their band manager and gave over the management duties to their drummer. Accordingly, things got very 'big' all of a sudden. They had to hire separate limousines for each member of the band at airports. Each limousine represented a different style of music within the band.

That form of ostentatious over-spending was never present in the Zoe organisation. But the elements of internal frictions, energy and the creative process were present. Like whenever a group of people get together to do something cooperatively.

These property development firms are an awful lot like rock bands in a way. Some music bands do produce really good quality stuff which lasts. Others take advantage of the 'market' a little bit. What I do know, is that when you are working on the inside, there are strong personalties. To survive within the group, your personality has to be equally big to withstand criticism etc. There were a lot of big personalities within Zoe. Maybe that constant friction had a negative impact. Maybe it distracts from the needs of the community you mean to serve.

Make no mistake about it, the guys in Zoe had their differences, but no one wanted to leave the band. Fleetwood Mac talked a lot about their 'bubble', their world within their world. A lot of them worked really hard. A lot of guys worked themselves to exhaustion. It was an industry. Hopefully now, many will have a chance to reflect. To think about some of the points in this article by John Downes. Hopefully, future participants in the business can get it right for Dublin and for Ireland.

Check out that documentary on the band Fleetwood Mac if you get a chance. They went through a lot of daft experiments in developing the 'creative process' also. Sometimes the creative process was exactly the thing that suffered. Many architects who made their reputations through Zoe developments. They needed Zoe a lot more than Zoe needed them. They would jealousy back up the status quo within company, in order to preserve their own option to succeed as designers and have their reputation enhanced.

There is that to think about too. For many architects, the creation of one's own image and fame is more important than anything else. Like I said, a property firm is not too different from a rock band.

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Re: Liam Carroll: I did it my way?

Postby Solo » Fri Mar 12, 2010 11:50 pm

Hi All,
Reading thread, interesting. It seems the Liam Carroll of Zoe Dev I remember has been replaced by an imposter. I also did work for him but stopped as I had standards I would not compromise. The Liam Carroll I knew would not spend Christmas, his own house had not seen any maintenance in possibly twenty years. I cannot be absolutely certain but I understood he carried a big jar of petroleum jelly around so he did not miss an opportunity to screw someone. He had no regard for any health and safety on his sites ( it was this point at which I drew the line ) and people died needlessly. Do not feel sorry for Liam no matter what happens he will have stashed plenty away that the receivers will never see and he will retire on a very nice pension indeed.

Instead feel sorry for all those who have lost everything by his welcome demise.
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Re: Liam Carroll: I did it my way?

Postby garethace » Tue Mar 16, 2010 1:07 am

Solo,

Good to hear your input - you seem to speak from experience indeed. I agree with you. When one person, with a narrow vision of the world gets complete control of an operation carrying billions in debt, it is seriously wrong. I suppose at the time, I wrote much of the above, I was trying see how one could debate things with regard to the construction industry. I watched a very feeble attempt on RTE this evening on Pat Kenny's The Frontline TV show.

http://www.rte.ie/news/2010/0315/thefrontline.html

A much, much better attempt was offered by Pat in his interview with Thomas Duffy linked below.

Procurement
25 February 2010 12:00
Thomas Duffy, from Duffy Chartered Engineers in Louth.

http://www.rte.ie/radio1/podcast/podcast_patkenny.xml

I mean to say - the brick layers unions had plenty to say when the times were great. Now that brick layers really need suggestions, I don't hear of any unions making any. Presumably the same unions made a lot of money to pay people to do some thinking also, during the Celtic Tiger. That is what astonishes me quite frankly. Over 200,000 construction workers left without a livelihood, and no attempt at constructive debate whatsoever. Is that what Ireland is really like?

Brian O' Hanlon

P.S. Solo, one question if I may. Did you work in one of Liam Carroll's companies, for instance, Zoe developments or as an external consultation/services provider to Liam Carroll? This question is significant. People have very different perceptions of who he was, what he was about etc, etc. I wrote a Designcomment blog entry, Drinking and Property, a while back about the issue.

http://designcomment.blogspot.com/2009/09/drinking-and-property.html
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Re: Liam Carroll: I did it my way?

Postby Solo » Tue Mar 16, 2010 2:59 am

Both
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Re: Liam Carroll: I did it my way?

Postby garethace » Tue Mar 16, 2010 7:13 pm

Interesting. Thanks.

Brian O' Hanlon.
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