Banks owed €113m by McInerney Homes oppose examinership process

THREE banks owed tens of millions of euro by house builders McInerney Homes opposed the firm and related companies being allowed go into examinership, the High Court has heard.

The syndicate of three banks – Anglo Irish Bank, Bank of Ireland and KBC – which are owed approximately €113 million by McInerney, also told the court they will not support any rescue plan for the housebuilders because they do not believe such a scheme will succeed.

However, the firm disputes the bank’s argument and argued before Mr Justice Frank Clarke that it was an “ideal candidate” for an examinership.

Last month, the court appointed William O’Riordan as interim examiner to McInerney Homes and four related companies, McInerney Holdings, McInerney Construction Holdings, McInerney Contracting and McInerney Contracting Dublin.

Yesterday, the company applied to Mr Justice Clarke to have Mr O’Riordan confirmed as examiner, allowing him to put together a scheme of arrangement that would ensure the firm’s survival.

In a report to the court Mr O’Riordan said he concurs with the assessment of an independent accountant’s report that the companies have a reasonable prospect of survival if a scheme of arrangement can be agreed and approved.

The court also heard that other parties, including NAMA, the Revenue Commissioner and other banking creditors of the group, were taking a neutral stance in regards to the appointment of an examiner. The judge said he would give a decision on Monday.

Seeking Mr O’Riordan’s appointment John Hennessy SC for McInerney said the firms were “ideal candidates” for examinership. He said there was a business plan in place which predicted modest growth over five years.

Counsel said the US private equity group Oaktree Capital will invest €40m in the group if the scheme is approved. However, Rossa Fanning Bl for the banks said while talks with Oaktree had taken place the syndicate position was clear: It is opposed to the companies being allowed go into examinership.

Counsel said an examinership would amount to “a raw deal for the banks”, as the banks' debt would be slashed and it would be tied into the firm’s fortunes.

He said an independent accountant’s report said that to survive the company required either support from the banks or finance from an alternative source.

Counsel said the syndicate would rather take their chances and have a receiver appointed.