THE creditors of liquidated stockbroking firm Bloxham could get 40 cent in the euro of what they are owed - rather than 10 cent - if a company liquidator wins his legal challenge to an Irish Stock Exchange (ISE) decision to revoke its membership, the High Court heard.
Creditors include National Irish Bank, owed €8.5m, and the Revenue Commissioners, owed €2.3m.
Liquidator Kieran Wallace claims the decision to revoke Bloxham's membership of the Stock Exchange cost the firm €6m, and was not made for proper purposes, or for the benefit of the company as a whole, and should be set aside.
His barrister Lyndon MacCann said yesterday that the revocation had to be seen against the background of 'Project Chrysalis' under which the ISE was planning to restructure so as to allow corporate members benefit from its €45m reserves.
The decision to revoke Bloxham's membership in December 2012, when Project Chrysalis was under way, appeared to arise from a view that, if Bloxham could be "got rid of", there would be "a bigger cake" to be shared between a smaller number of firms, counsel argued.
Major firms including NCB Stockbrokers, Goodbody and Davy stood to benefit from the restructuring under which it was proposed to distribute €28m excess capital from the reserves capital, the court heard.
The ISE was originally intended to be a not-for-profit entity but the restructuring proposals arose because it had built up the €45m in reserves which were not distributable.
Its management had taken the view it (restructuring) was "not just desirable, but essential", counsel said.
The case is being heard by Mr Justice Peter Charleton in the Commercial Court and is listed to run for four days.
During his opening, Mr MacCann said the revocation of Bloxham's membership of the exchange arose after the Central Bank in late May 2012 suspended the firm from trading as a result of concerns about its financial position.
The €6m which Bloxham stood to gain from implementation of Project Chrysalis represented a difference between a 10 per cent and 40 per cent dividend, he said.