DEVELOPER John Fleming has secured court protection for two companies in his building group, whose inability to repay ACCBank €21.5m almost triggered the collapse of his construction and development empire with debts of more than €1bn.
The troubled Fleming Group was granted a lifeline yesterday after the High Court appointed an examiner to John J Fleming Construction (Construction), described as "the engine" of the 30-strong Fleming Group.
JJ Fleming Holdings (Holdings), an investment vehicle which cascaded borrowings down to firms within the group on an inter-company basis, has also been afforded court protection.
Holdings is the holding company of Fleming's Tivway which was given court protection last July and court protection will remain in place for all three companies until October 17.
Examiner George Maloney of Baker Tilly Ryan Glennon was appointed to Construction and Holdings despite the fact that he had given no estimate of the potential cost or timescale for the completion of "legacy" developments.
Mr Justice Daniel O'Keeffe also noted a lack of unconditional funding from banks which supported the application to complete the remaining legacy building work to be undertaken by Construction.
However, he observed that lenders may be reluctant to give unconditional support owing to the magnitude of the group's debts.
The judge said that "a lot of unfilled boxes" have to be filled, but exercised the court's discretion to bring Construction and Holdings into the examinership process.
He said this was because he believed examinership was a more preferable course of action than a winding up.
He based his decision on survival plans posed by the examiner to "hive off" the profitable part of John J Fleming Construction Company and the completion of remaining development assets.
Evidence tendered by the examiner, the report of an independent accountant, and a report from DTZ Sherry Fitzgerald were "not all assertions", but demonstrated objectivity and an objective rationale, albeit subject to conditions.
"Nobody can predict future trends and prospects with precision," said Judge O'Keeffe.
"But this (decoupling) does not preclude the revamped Construction being profitable in the future.
"The fact that Construction is engaged in a winding up of its unprofitable business does not prevent it from operating on a going-concern basis.
"I am satisfied that, if restructured in this way, as set out in the accountant's report, part of the activities of Construction will be capable of being a going concern in the short term at the very least."
ACC, which today will oppose moves in the Supreme Court by developer Liam Carroll to reverse a second High Court order refusing his Zoe Group court protection, said it would to take formal instructions on the Fleming ruling.
But the lender did not object to Judge O'Keeffe's orders extending court protection and did not seek a stay on them.