High Court approves 'survival scheme' for Manley Construction company
The High Court has approved a survival scheme for a family construction company which has been involved in a number of important infrastructural projects.
Ms Justice Marie Baker was satisfied Manley Construction, Duleek, Co Meath, should exit from what she said had been a "protracted and difficult examinership".
The result of the examinership had produced a "particularly satisfactory" result, she said.
It meant an old family business would be saved and that creditors would fare better than if it was wound up, she said.
Michael McAteer was appointed interim examiner last November after the court heard Manley, which employs 50, was insolvent and unable to pay its debts.
Ms Justice Baker noted the matter required some considerable degree of expertise by the examiner and there were a number of difficulties over the scheme, and objections to it which have since fallen away.
Earlier, Rossa Fanning SC, for the examiner, said Manley was in the construction business for 30 years and before examinership found itself having to finish unprofitable work which it was contracted to complete.
Its directors had made loans before the examinership of some €3.4m but losses of €4.6m had accumulated between December 2015 and August 2017.
The essential issue in controversy over the scheme was in relation to the treatment of a disputed contingent creditors which includes the HSE, Mr Fanning said.
These were companies or organisations which the company had claims for work done over but over which there were also cross claims in relation to deficiencies in the work.
This was resolved by an offset arrangement in relation to those claims and by allowing these creditors to go into the general class of secured creditors.
However, under a winding up these creditors only have got a "derisory" dividend of 0.1 per cent compared to five per cent if the company was maintained as a going concern, counsel said.
"In simple terms, it was better than nothing and these creditors would have obtained nothing in a winding up," he said.
Under the scheme, counsel said, it had been agreed that the loans from the four directors of the company would be converted to ordinary shares.
There was no fresh money being put into company as a result of the examinership but this was not unprecedented, counsel said.
Frank Crean SC, for the company, said this was a business, which involved two generations of the Manley family and at one point had a turnover of €24m, which was "worth saving".