McInerney Group loses protection as court rejects 'new' rescue bid
Published 22/02/2011 | 05:00
THE High Court is to withdraw protection from the troubled construction firm, McInerney Group, from Friday, February 25, after rejecting a proposed rescue package.
Mr Justice Frank Clarke yesterday said that a proposed investor in the firm -- US hedge fund, OakTree -- had engaged in an abuse of process by attempting to increase its offer for the Irish firm after the court had indicated its judgment on the rescue package last Thursday.
The examiner yesterday brought the court's attention to an improved offer from OakTree.
The US fund had offered to increase its offer for McInerney's by €6.6m.
This followed Mr Justice Clarke's ruling last week that one of McInerney's bankers, KBC, would be unfairly prejudiced under a rescue package because it did not have access to the NAMA scheme.
OakTree's increased offer for McInerney's -- which would have included a significant cash sum for KBC -- was aimed at specifically addressing the issue of unfair prejudice. The rescue package would have allowed the firm to exit examinership but only after its debts had largely been written off.
KBC currently holds a 26pc stake in the construction firm's liabilities.
Unlike Bank of Ireland and Anglo Irish Bank, the other banks in the McInerney syndicate, KBC does not come under the terms of NAMA.
Mr Justice Clark yesterday said that OakTree could have increased their offer at any stage -- but, by doing so after the High Court had indicated its judgment on the rescue package, effectively engaged in an abuse of process.
"The court is not part of a negotiating process," he said.
On application, he said he would remove the court's protection from McInerney's -- but granted a stay on the order until 2.30pm on Friday. If no appeal is signalled, receivers would then be appointed.
McInerneys -- one of Ireland's oldest building firms -- employs 280 workers but, like other firms, has been badly hit by the recession and property market collapse.
It now owes more than €110m to a syndicate of three banks, Anglo Irish, Bank of Ireland and KBC and has been in court-approved examinership for the past year.
Last week, Mr Justice Clarke 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 would get involved in McInerney's, given its property-related debts.