Modified survival scheme for firms may allay bank concerns

A MODIFIED survival scheme for two companies in Galway businessman John Sweeney’s Black Shore group may resolve Anglo Irish Bank’s concerns about the scheme, the High Court heard yesterday.

The companies – Sweeney Oil Retail Ltd and Sweeney Oil Service Stations Ltd – employ 37 people at service stations and associated retail units in Westport, Co Mayo, and at Clifden and Moycullen in Co Galway.

Examiner, Michael McAteer, was appointed to the companies earlier this year and had advanced survival proposals on the basis of which the companies are believed to have a reasonable prospect of survival.

Both had always traded profitably but their exposure to other companies in the insolvent Black Shore group resulted in their financial difficulties. Anglo is owed €3.5 million by SORL and was the companies’ largest creditor. It claimed some €1.7m being made available to it under the survival scheme was less than it would secure if it appointed a receiver who would ultimately sell the companies.

It also disputed valuations obtained by the examiner which put the companies business at some €1.2m and claimed it the business has a value of up to €2.4m. 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. The bank is owed some €50m by various companies of Mr Sweeney.

The application for approval of the survival proposals was due to resume yesterday, but there had been developments overnight.

The judge agreed to adjourn proceedings to today.

Lyndon MacCann SC, for Anglo, said it was hoped the modifications would address the bank’s complaints relating to its interests being prejudiced by the existing survival scheme and how an investment of €1.7m was to be made via an interest-free loan from a company involving Mr Sweeney’s 21-year-old son. It was also hoped issues concerning the lease for the Moycullen property would be resolved.