ACC bank has today urged the High Court to reject an application made on behalf of companies in the Liam Carroll-controlled Zoe group to be placed into examinership.
Today Lyndon McCann SC for Dutch owned ACC bank, whose demand for repayments of €136m loans led to Zoe's application for protection, said that the application "is aspirational and speculative at best" and "does not meet the requirements of the 1990 Companies Act".
Counsel said that the court should reject the petition on grounds including that insufficient evidence had been put before the court in relation to the seven companies seeking protection that would allow the court to conclude that they have a reasonable prospect of survival post any period of examinership.
Mr McCann made his submission on what was the second day of a second attempt by firms in the Property Group to secure court protection after the High Court and Supreme Court refused to appoint an examiner to the firms.
Zoe has bank borrowings of €1.2bn and claims it faces collapse if it is not allowed enter examinership.
Counsel said that under the terms of a business plan put to Zoe's banking creditors in order to ensure its survival a two-year moratorium on interest payments was included.
However Counsel said that if Zoe's banks loans were "Nama'd" there was no indication of how Nama would approach these loans.
Counsel said that his client feared it could end up being owed more than it is current at the end of that period.
Mr McCann also said that economic evidence before the court in relation the future of Irish property market from Prof. Morgan Kelly of UCD had been "glided over" and "poo-poohed."
Counsel said that Prof Kelly, who Mr Justice Frank Clarke said predicted that the Irish property market would suffer a "non-soft landing" prior to the crash, has submitted in a report that property values could remain at half their peak value for up to a decade.
Counsel also argued that evidence of support from banking creditors about the future financing of the companies "did not say much".
Counsel also described as "flawed" a business plan, which included a moratorium on interest payments for two years and envisages a return to solvency by 2011, put before the banks creditors as part of a survival plan of the companies.
Counsel said that the plan was "differed receivership", which is something not envisaged in the legislation governing examinership.
Counsel also expressed his concern that warranties entered into by the firms in relation to its properties it had have not been properly addressed in the business plan.
Counsel said that there a dispute involving Google Ireland, a tenant of a Zoe firm property at Barrow Street in Dublin.
It was claimed that there is was a defect with that building that needed to be rectified.
Counsel said it was not considered in the business plan how much that dispute and any other arising out of warranties given by the firms could cost.
In response Bill Shipsey SC for the companies said that the dispute in relation to the building which houses Google related to a lift.
The matter counsel said was being taken up with the firm that installed and manufactured the lift.
Mr Justice Clarke said that he is unlikely to have reached a conclusion in the matter by then.
The Judge, acknowledging the importance of the application, indicated that it will be Monday 14th of September before he would ready to give judgment.
He said that he would need to fully outline any decision he makes in case any party wished to appeal.
The case continues on Monday when Mr Shipsey will continue with his reply to ACC's submissions.
The petition to have an examiner appointed to Liam Carroll's firms was brought by Vantive Holdings which, with Jersey-registered Morston Investments Ltd, are the parent companies of around 50 companies known as Zoe Developments.
The other companies include Villeer Developments, Paytor Developments, Carragh Enterprises Ltd and Parlez International Ltd and a seventh company Royceton.
The firms have a very substantial portfolio of investment and development outlets.
Zoe is seeking the appointment of an examiner which would give it up to 100 days to come up with a scheme that would allow them to continue to trade as a going concern.
Any scheme would ultimately require the approval of the High Court before it could come into being.
The petition is being supported by AIB, Bank of Ireland and Bank of Scotland Ireland are supporting the petition. Other banking creditors such as Anglo Irish Bank, Ulster Bank have not objected to the petition.
The application for the appointment of an examiner is also been supported by employees of the companies and sub contractors and creditors of other firms controlled by Liam Carroll.