THE battle for developer Noel Smyth's €167m Alburn Real Estate Capital UK property empire continues to rage, with lenders now fighting each other for control of a process to sell off the assets.
In May, Mr Smyth lost control of the UK portfolio, which includes 29 office blocks, among them Project House on London's Tottenham Court Road.
Receivers were appointed after Mr Smyth's Jersey-registered investment company failed to repay or restructure £200m (€252m) of debt.
The debt secured on the property empire was a complex, multi-layered facility. In the current liquidation scenario only the most senior lenders in the structure are regarded as "in the money", meaning they will see some recovery on their loans despite falling property values.
They voted to appoint receivers to sell off the assets after a long-running effort by Mr Smyth to cut a consensual deal failed to bear fruit.
However they are now battling with more "junior lenders" for control of the sell-off process.
Pearsanta, a company owed about £11m of the total debt, has taken legal action to have its own nominee appointed to oversee the sell-off.
That is despite the fact that the loans held by Pearsanta rank among the last to be repaid from the proceeds of the property sales, and at current prices are unlikely to see even a penny once the portfolio is liquidated.
The move is controversial, not least because Pearsanta, which is owned by Switzerland- based Vincent Barrett, only acquired the debt in recent months and at a fraction of face value. However, the complex financing package backing the property empire gives the so- called junior lender considerable legal rights.
On Friday, senior lenders owed the bulk of Alburn Real Estate's £200m debt, were told Pearsanta's efforts to fast-track the challenge had failed, with no date yet given for a substantial hearing on the issues.
It gives receivers from Savills and administrators from Moorfields Corporate Recovery time to press on with efforts to sell off the properties.
Mr Smyth has said he will work alongside the receivers to manage the portfolio.