Judge rejects McInerney rescue package
Published 18/02/2011 | 05:00
A PROPOSED rescue package for one of Ireland's biggest construction companies, the McInerney Group, was rejected by the High Court yesterday.
McInerney -- one of Ireland's oldest building firms -- employs 280 workers but, like other firms, was badly hit by the recession and property market collapse.
It owes more than €110m to a syndicate of three banks, Anglo Irish, Bank of Ireland and KBC and has been in court-approved examinership.
The current rescue package -- backed by US investors -- would have allowed the firm to exit examinership but only after its debts had largely been written off.
KBC holds a 26pc stake in the construction firm's liabilities.
The High Court yesterday declined to confirm an order for a rescue package for two firms in the debt-laden building group amid concerns that one of the banks, KBC, would be unfairly prejudiced by such a move.
Unlike Bank of Ireland and Anglo Irish Bank, KBC does not come under the terms of the National Asset Management Agency (NAMA).
Mr Justice Frank Clark, delivering his ruling in Cork, said legal teams for the examiner, McInerney and its three main creditor banks can make further submissions on Monday next.
He will only make his order at that point. Mr Justice Clark said that NAMA had declined to make its position clear on the McInerney Group.
However, the judge said that it was "quite likely" that NAMA may get involved in McInerney given its property-related debts. "NAMA declined to give any indication as regards what it is going to do," Mr Justice Clark said.
However, even in the event of NAMA getting involved with McInerney, he said it was possible that the agency could view a long-term receivership process as more profitable and beneficial than short-term disposals.
"It seems to me that it is significantly likely that the loans will go in (to NAMA) and, therefore, the possibility that they may not needs to be very heavily discounted," he explained.
Last month, he had refused to confirm the rescue package for McInerney Homes Ltd and McInerney Contracting Ltd on the grounds that it was "unfairly prejudicial" to the syndicate of all three banks.