Banks to oppose McInerney examinership
Published 08/09/2010 | 05:00
Three banks, which between them are owed a total of €114.5m by house builder McInerney Homes, are opposing examinership of the construction group.
Barrister Rossa Fanning, counsel for Bank of Ireland, Anglo Irish Bank and KBC, told Ms Justice Mary Finlay Geoghegan yesterday that the banks were against the appointment of an examiner by the High Court.
Judge Finlay Geoghegan said the matter would be heard by Mr Justice Frank Clarke on Friday.
Last week the High Court appointed William O'Riordan as interim examiner to McInerney Homes Ltd, Waterford, and four related companies; McInerney Holdings plc, McInerney Construction Ltd and McInerney Contracting Ltd.
The court was told the companies were seeking protection from creditors because of cash-flow problems they blamed on a direction to the banks by NAMA, the National Assets Management Agency, to cancel their overdraft facilities.
The group has a total of 279 employees, 100 of whom are based in Ireland. In 2003 McInerney employed 750 workers.
It started off building homes in the west of Ireland in 1909 and now has operations all over the country as well as in the UK and Spain. The company had been profitable but due to the severe downturn in the construction industry had incurred losses.
Barrister Declan Murphy, counsel for McInerney, earlier told the court the company had been informed by their banks that the group would not be allowed to retain any proceeds of house sales even for the most basic of working capital requirements. It had been told its overdraft was being cancelled.
Mr Murphy said an independent accountant's report had revealed that the group had a reasonable prospect of survival if a scheme of arrangement involving creditors was approved.
Commenting on the case a London-based banker who specialises in financial restructuring said the three banks might prefer to see their own receiver appointed rather than a court appointed examiner. That would allow the lenders to exert more control over the situation, and avoid the uncertainty inherent in any court process.
But the same source reckoned that lenders are ultimately likely to be broadly in favour of a plan developed by McInerney and US investor Oaktree if it means a viable business can emerge from the process.