ACC to seek wind-up of firms in Fleming group
Move comes after Supreme Court refuses protection despite debts of €1bn
Published 05/03/2010 | 05:00
ACC Bank will this morning ask the High Court to wind up three insolvent companies in the Fleming building group, which has debts of more than €1bn.
It follows a decision yesterday by the five-judge Supreme Court to unanimously refuse protection for the companies, which had fought a lengthy legal battle to rescue the group.
The court said the facts of the high-profile case were "bleak" and epitomised "the consequences of the recent property boom and bust" which had left many people in "dismal situations".
Last night insolvency experts said that the ruling, which follows the rejection on two occasions of developer Liam Carroll's bid for court protection for his Zoe Group, had "placed the final nail in the coffin" for insolvent construction companies seeking court protection from their creditors.
The Supreme Court found the proposed survival schemes for John J Fleming Construction (JJFC), JJ Fleming Holdings (JJFH) and Tivway Ltd did not amount to a plan with a reasonable prospect for their survival as "going concerns".
The schemes were instead a "holding plan" involving the sale of the profitable "engine" or construction arm of the group to a new company outside the examinership, leaving behind an impaired property development business, Ms Justice Susan Denham said. The plan was to keep sites in a land bank for 10 years in the "hope" the property market would improve by then and the banks would support a build-out programme at an appropriate time in the future, she said. An examinership was "not a process for sale", said Judge Denham.
Some 137 people are employed by JJFC but, even if the schemes had been approved, all but 15 of those jobs were to go to companies outside the survival scheme, she added.
The judge also noted both JJFC and JJFH were unlimited companies whose shareholders, John and Noreen Fleming, had transferred €3m of their assets to trust funds in May 2009 and also pledged some €5m to the proposed survival schemes.
ACC had said the guarantees of Mr and Mrs Fleming in the two unlimited companies were significant to it and approval of the schemes would deprive it of that "route" to the Flemings.
Ms Justice Denham was giving the court's judgment allowing the appeal by ACC against a High Court decision last November approving the schemes which ACC, owed €22m by Tivway, had described as "asset stripping" and a "personalised NAMA".
The Fleming group has total debts of some €1bn, including €260m to Anglo Irish Bank and liabilities to AIB, Bank of Scotland Ireland and hundreds of unsecured creditors. All but ACC supported the schemes.