The High Court has confirmed the appointment of an examiner to housebuilding firm McInerney Homes and a number of related companies.
In confirming Mr William O'Riordan of PWC as examiner to McInerney today Mr Justice Frank Clarke also ruled that the examiner must in a report to the court address a number of issues of concern by early October or the process, opposed by a syndicate of three banks owed €113m by McInerney, could be terminated.
In seeking Mr O'Riordan's appointment McInerney claimed it was "an ideal candidate" for the examinership process on grounds including that an independent accountant's report stated the firms have a reasonable prospect of survival.
However Bank of Ireland, Anglo Irish Bank and KBC opposed the move. They said they would not support any rescue plan for McInerney as they did not believe it would work.
In his ruling confirming Mr O'Riordan as examiner today Mr Justice Clarke said that while it was possible at this stage to conclude that the firms have a reasonable prospect of survival, he was putting in place the unusual step of having the examiner prepare a report to deal with a number of areas of concern.
McInerney, he said, had recorded losses of €160m due to a downgrade in its assets which represented a major hole in their accounts. The judge said he believed there were three possible ways in which the company could be saved.
The first, he said, was if the the banking syndicate, through the examinership process, could come to an arrangement with the companies and the investor.
Secondly the existing banks could stay on as lenders to the companies against their wishes or thirdly he said that a new bank or syndicates could take over the existing loans at a reduced amount. However the Judge said that he could see a number of problems with these three scenarios.
The Judge said that he wanted "a clear view from the examiner" in his report if there was any reality to the banks, McInerney and their investors negotiating a settlement.
The Judge said the report must also address if alternative banking arrangements can be entered into and if there are any legal impediments preventing the banks from being forced to stay on as lenders to the firm against their wishes. The Judge said that the continuation of the examinership process depended on what was contained in the report.
Mr O'Riordan was confirmed as examiner to McInerney Homes Ltd, with a registered address at Cleaboy Business Park, Waterford and four related companies McInerney Holdings Public Limited Company, McInerney Construction Holdings Ltd, McInerney Contracting Ltd and McInerney Contracting Dublin Ltd.
Should the process be allowed continue he has until the end of November to put together a scheme of arrangement that will ensure McInerney's survival.