Hutchison Whampoa fails in bid to take over Eircom
TELECOMS giant Hutchison Whampoa has failed in a legal effort to force its way back into a takeover battle for Eircom.
The decision clears the way for a key vote by the company's creditors today, which will set in motion a scheme for Eircom to start the exit from the biggest-ever Irish insolvency case next week.
In the Commercial Court yesterday Mr Justice Peter Kelly comprehensively rejected a challenge by the owner of 3 Mobile, Hutchison Whampoa and New York-based DW Investment Management, which is a lender to Eircom.
They had taken the case after Eircom's examiner Michael McAteer said he would recommend a survival plan based on a proposal from the company's most senior lenders, who want to take ownership of the bankrupt business.
Hutchison Whampoa and DW Investment wanted a process to sell the company reopened in order for Hutchison Whampoa to make a formal takeover offer -- after an initial bid was turned down by Mr McAteer.
The challenge included seeking access to confidential Eircom data and a request to delay meetings of Eircom creditors scheduled for today -- when a survival plan is due be voted on.
Judge Kelly rejected the application on a number of grounds saying it "fell far short" of the legal test that has to be met before a court interferes in the work of an examiner.
Other than a case involving fraud, interference by the courts should be limited to cases where the examiner has done "something so unreasonable and absurd that no reasonable practitioner would have done it".
The case taken by Hutchison fell far short of that test, the judge concluded.
"On the contrary, I believe there was an entirely rational and reasonable basis for the examiner's decisions," Judge Kelly said in a judgment read out as soon as two days of legal arguments ended yesterday.
Mr McAteer had identified "numerous" shortcomings in the Hutchison bid, he said.
The judge ruled that Hutchison Whampoa and DW Investment Managers must pay the costs of all of the parties to the case.
"We are disappointed with today's outcome, however we respect the court's decision," a spokeswoman for 3 Mobile and Hutchison Whampoa said in a statement.
The ruling means meetings of Eircom's creditors may proceed today, where Eircom's two highest-ranked sets of secured lenders are expected to formally back their scheme to take control of the business.
Once they do, it clears the way for a hearing to confirm the scheme to take place as soon as next Thursday, in what would be record time for a large examinership case.