Judge to review confidential file on McInerney assets
Published 03/11/2010 | 05:00
A HIGH Court judge has said he wants more information on valuations of property owned by the troubled McInerney construction group before a hearing takes place on a rescue plan for the group.
Mr Justice Frank Clarke wants to have the confidential information today before he decides whether it can be released to a syndicate of three banks owed more than €114m and which are opposing McInerney going through the examinership process.
He said he would continue to extend the protection of the court until Friday, when a full hearing of the matter is scheduled to take place.
Five McInerney companies have been under High Court protection from creditors since late August.
An American private equity house, Oaktree Capital, is in negotiations with the examiner to take a €40m stake in the group and is committed to invest at least €10m in the Irish operation as part of a rescue plan. The bank syndicate -- comprising Bank of Ireland, KBC and Anglo Irish Bank -- is objecting to any extension of the examinership.
Yesterday, counsel for the examiner gave Mr Justice Clarke a confidential letter outlining valuations put on McInerney properties. The judge said the primary driving factor behind the company's losses was that its directors had taken the prudent view of writing down the value of property assets to the order of 50pc.
What was not clear was whether a further write-down was required and he wanted more information on that. Bernard Dunleavy, counsel for the examiner, said that information could be supplied today.
Earlier, Mr Dunleavy said that the examiner had stated in an affidavit that he was actively engaging with Oaktree and had formed the view that he would be in a position to have a scheme in place to ensure the company could survive as a going concern.
Further time was required and a deadline had been set out for the steps required to finalise this, counsel said. It would be "entirely corrosive" to the examinership process if the examiner had to conduct negotiations with the investor in public or with the banks "looking over his shoulder".
The negotiations needed to be conducted in private as is normal in examinerships, Mr Dunleavy said.
Rossa Fanning, counsel for the banks, said they were continuing to oppose the examinership process in a situation where, nearly 70 days after the examinership began, his clients had less information about the survival scheme than they had at the beginning.
The longer the process went on, the higher the costs, which would have to be met by his clients, Mr Fanning said.
The banks were concerned that the proposed investment would be "palpably inadequate" for any survival scheme, he said.
If the court was to put the matter back so that more information could be provided, he wanted that information delivered to his side so they could know if there was any justification for continuing the examinership.