Anglo opposes High Court survival scheme for 2 firms

ANGLO Irish Bank, which is owed some €50 million by Galway businessman John Sweeney owned companies, is opposing survival schemes proposed by a High Court- appointed examiner for two companies in his insolvent Black Shore group.

Sweeney Oil Retail Ltd and Sweeney Oil Service Stations Ltd, which employ 37 people, including 30 full-time staff at service stations and associated retail units in Westport, Co Mayo and at Clifden and Moycullen in Co Galway.

The survival schemes were proposed yesterday by James Doherty, for Michael McAteer, the court-appointed examiner to the companies, and supported by the companies and a number of small creditors. Anglo is the largest creditor while Bank of Scotland Ireland, which had earlier opposed the scheme, withdrew its opposition.

The hearing will continue today before Mr Justice Brian McGovern.

Mr Doherty said the business of the companies is part of the fabric of the towns in which they are situated and the evidence was they had a reasonable prospect of survival if the schemes, which the examiner considered included the best investment offer available, were approved.

“Very serious questions” arose about the true motivation of Anglo in opposing the schemes as it would receive what the examiner, based on valuations, regarded as the full value of its security, counsel said.

Anglo is owed €3.5m by one company and claims the €1.7m being made available to it under the survival scheme is less than it would secure if it appointed a receiver who would ultimately sell the companies.

It has taken issue with valuations obtained by the examiner which value the companies’ business at €1.2m, claiming it has a value of up to €2.4m.

It also claims, even if a receiver were appointed, he/she would continue to run the business until an acceptable offer was made, which could involve the retention of existing jobs.

Anglo previously installed a receiver over a number of assets in the Black Shore group after the holding firm failed in a bid for examinership last February.

Lyndon MacCann, for Anglo, also expressed concern yesterday the €1.7m “investment” in the companies via an interest-free loan was being provided by a company involving Mr Sweeney’s 21-year-old son who would manage the business.

There was no information as to what experience he had, counsel said.

Bernard Dunleavy, for the companies, said both had always traded profitably but were “hamstrung” due to their exposure to other companies in the Black Shore group.

Anglo itself had not challenged evidence they had a reasonable prospect of survival if the proposals put before the court were implemented, he said.