Affordable-housing firm says it will be ‘destroyed’ by new funding plan
Payments for operations to be halved to €10m, CEO tells court
A debt-advisory group working to provide social and affordable housing claims a decision by a funding partner to halve payments for day-to-day operations from €20m to €10m will destroy the group.
New Beginning Management Services Ltd (NBMS) and New Beginning Development Services Ltd (NBDS) are involved in providing, through partnership with international capital, funding for social and affordable homes leased on a long-term basis to local authorities and approved housing bodies.
They have brought High Court proceedings against four asset management and fund manager firms seeking to restrain the termination of an agreement which it is claimed will have “devastating and irremediable consequences for New Beginning”.
The proceedings are against the Platform ICAV, for and on behalf of its subfunds Irish Social Housing Fund I and the ISH New Build Fund, and against RS ISH Advisors Ltd, IQ EQ Fund Management (Ireland) Ltd and the RoundShield Partnership LLP.
NBMS says in 2018 it entered into an asset management agreement with The Platform ICAV and RoundShield.
It was amended in 2022 with RS ISH Investment Advisors as a party in relation to the ISH sub fund. In 2021, the second New Beginning firm, NBDS, entered into a separate agreement with the Platform ICAV. IQ EQ Fund Management was the alternative investment fund manager.
It is claimed a decision has been made that RoundShield investors will exit the ISH fund and that RoundShield conspired to bring about the termination of that agreement. It will have the result of at least halving the commercial return due to NBMS “and of destroying NBMS as a going concern with the loss of jobs”.
Ross Maguire, CEO of New Beginning, who is also a senior counsel, said in an affidavit that some 10 jobs will be lost and the group will be unable to pay rent and other overheads.
It will also lose the opportunity of tendering its services to any new owner of the ISH and New Build funds. NBMS is effectively prohibited from undertaking services for any other party without prior agreement from RoundShield under the ISH agreement, he said.
He said since 2018 he has put his profession as a barrister on hold because he is committed and confident of delivering the long-term social housing strategy which he says he conceived.
The termination of the agreement, he said, will damage New Beginning’s reputation and standing among approved housing bodies and local authorities. If carried through, it will irreparably damage relationships built up in the provision of long-term social housing.
The case was admitted to the High Court’s fast track commercial division yesterday on the application of Joe Jeffers SC, for the New Beginning firms, and with the consent of Kelley Smith SC, for the defendants.
The judge fixed a date next month to hear the injunction part of the proceedings after he was told the termination is due to come into effect on May 22.
The New Beginning firms are seeking a declaration that the notice of termination of the agreement of February 21 last is void, invalid and of no effect. A declaration is also sought that the notice was issued for an improper purpose and was in breach of contract.
Damages are also sought.
It is claimed it will have ‘devastating and irremediable consequences’