Business Commercial Property

Sunday 21 September 2014

O'Flynn to learn on Monday if he can retake €1bn empire

Peter Flanagan 
and Ray Managh

Published 06/08/2014 | 00:00

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Michael O'Flynn of O'Flynn Construction Group

THE US investment firm attempting to take control of Michael O'Flynn's property empire was accused of "the most extraordinary non-disclosure" and "misrepresentation" in the High Court on Tuesday.

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Counsel for Mr O'Flynn, who is fighting to overturn the appointment of an examiner to his businesses last week, said Blackstone had moved to take over the business within six weeks even though NAMA had worked successfully with O'Flynn Construction for the previous four years.

Michael Cush SC, counsel for Michael and John O'Flynn and their companies, has described the appointment of the examiner as part of an improper attempt to take over the O'Flynn group.

Mr Cush also alleged that Blackstone had created cashflow difficulties for the business.

Mr Justice Brian McGovern last week granted court protection to the four companies concerned: O'Flynn Construction Company; O'Flynn Construction BTC; O'Flynn Construction (Rochestown); and Eastgate Developments (Cork).

He appointed Michael McAteer of Grant Thornton as interim examiner and directed that an independent accountants report be prepared by Kieran Wallace of KPMG.

Mr Cush yesterday told Ms Justice Mary Irvine that counsel was awaiting the provision of a number of affidavits grounding the challenge to the interim examiner's appointment.

Mr Eoin McCullough SC, counsel for Carbon Finance Ltd - a subsidiary of Blackstone - said he would be providing the court with a replying affidavit.

The case had been expected to take two days but is now likely to extend into Thursday. Judge Irvine said she would be the duty judge looking after all emergency applications until Thursday and would aim to provide a judgment in the O'Flynn case by Monday next.

On Thursday last Mr Cush was granted permission from the court to serve short notice on Carbon of the O'Flynns' intention to overturn the appointment on grounds of alleged non-disclosure of key facts to the court and improper purpose.

He said that what was really at the heart of the Carbon petition was the removal of the O'Flynn brothers, the principal shareholders in the four companies, who are also challenging demands made of them last Tuesday for immediate repayment of €20m personal loans.

He said the O'Flynns claim their loans were not in default and had not been given reasonable time to repay them. The repayment demands, accompanied with the appointment of receivers, was part of the alleged strategy by Carbon to take over the O'Flynn companies.

Blackstone had bought €1.8bn loans of companies in the O'Flynn group from NAMA which it is alleged the O'Flynn companies had provided guarantees over.

Last week Mr Cush said his client disputed claims by Carbon that when it applied to the High Court it was unable to provide the normal independent accountants' report in an examinership application because it had not received co-operation from the O'Flynns.

Carbon had access to the bulk of the necessary information, including management accounts up to June 2014, and could have asked for any additional information required, Mr Cush said.

Carbon was also aware of, but had not disclosed to the High Court, a legitimate dispute with his side concerning the proper construction of the facilities bought by it from NAMA, he said.

The personal loans are seen as a key part of the case, as they can be used as a vehicle to gain access to the wider group.

While the O'Flynn application proceeds, the examiner appointed to the businesses last week - Michael McAteer of Grant Thornton - remains in place.

Irish Independent

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