Friday 24 November 2017

High Court to review decision on McInerney's examinership status

McInerney group finance director Enda Cunningham
McInerney group finance director Enda Cunningham
Donal O'Donovan

Donal O'Donovan

THE High Court will review the decision to block the house-builder group McInerney from exiting examinership at a hearing in the second week in February, two sources involved in the case told the Irish Independent last night.

Mr Justice Frank Clarke decided to review his decision to block McInerney from executing a scheme to write off much of its debt and exit an examinership process after he learnt that loans owed by the group are likely to be transferred to NAMA.

Last night the court pencilled in a two-day hearing for the second week in February, with February 7 the likely start date.

Ruling

In an initial ruling on the case the judge backed arguments by Bank of Ireland, Anglo Irish Bank and KBC that they should not have to accept €25m from McInerney as repayment for €113m of loans.

The judge agreed the banks should be free to pursue their own plan to recover €50m from the loans though an 11-year receivership.

After the decision was announced, lawyers for McInerney said loans from Anglo Irish Bank and Bank of Ireland were likely to be transferred to NAMA. They said it raised questions over the receivership scenario outlined by the banks.

The NAMA element of the case had not been raised by either the company or banks in the original hearings.

The judge accepted the call to review his decision. The judges ruling on the case had not been formally handed down and can be changed without an appeal process.

On Thursday lawyers for McInerney submitted an affidavit setting out their views. Yesterday the three banks are understood to have requested time to respond to the decision, which has been granted.

Both sides affidavits' set out their position on whether or how the involvement of NAMA affects the case.

In his judgment setting out the reasons for reviewing his earlier decision, Justice Clarke said McInerney and the banks were both at fault for not raising the issue.

The case is being closely watched by property investors abroad because of the involvement of a US hedge fund.

US investor Oaktree had agreed to finance the McInerney rescue in return for a stake in the company, but only if the courts allowed the bulk of the company's debt to be written off.

Irish Independent

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